I’ve been seeing a lot of concern in the investor space lately about aggressive rate increases at renewal and the unpredictability of insurance quotes. If that’s been your experience, this industry update is worth paying attention to. AM Best’s updated reporting shows that the U.S. Property & Casualty insurance industry ended 2024 with a $22.9B underwriting profit—its first since 2020. That’s a sharp revision from the $2.6B loss initially published in February. (Feb. 2025, March 2025) So what changed? • Personal lines performance drove the shift. Auto insurance, in particular, corrected hard, with the combined ratio dropping from 104.9 to 98.7. Combined ratio is equal to (Incurred Losses + Expenses) / Earned Premiums. • Rate hikes and tighter underwriting had a real effect. Carriers across the board repriced risk more aggressively, especially in personal and small commercial lines. • Catastrophe losses remained high ($76B+), but overall loss ratios improved enough to swing the industry into the black. Personal lines performance drove the shift. Auto insurance, in particular, corrected hard, with the combined ratio dropping from 104.9 to 98.7. Combined ratio is equal to (Incurred Losses + Expenses) / Earned Premiums. Rate hikes and tighter underwriting had a real effect. Carriers across the board repriced risk more aggressively, especially in personal and small commercial lines. Catastrophe losses remained high ($76B+), but overall loss ratios improved enough to swing the industry into the black. Why this matters for investors: • Underwriting profit is a signal that the industry is stabilizing. We may see a slower pace of premium increases heading into late 2025 - but don’t expect rollbacks. • Carrier appetite may loosen, particularly for mid-market rental and rehab properties that were previously borderline. This could help investors navigating tough markets like FL and CA. • Insurers will still favor clean risk. Properties with updates, clean loss runs, and stronger maintenance records will continue to get the best treatment. Underwriting profit is a signal that the industry is stabilizing. We may see a slower pace of premium increases heading into late 2025 - but don’t expect rollbacks. Carrier appetite may loosen, particularly for mid-market rental and rehab properties that were previously borderline. This could help investors navigating tough markets like FL and CA. Insurers will still favor clean risk. Properties with updates, clean loss runs, and stronger maintenance records will continue to get the best treatment. There’s still volatility, especially in catastrophe-prone zones, but we’re not in the freefall that defined 2022–2023. If you’re underwriting deals this year, factor in that insurance markets are moving, but the hard market isn’t over. Expect pricing discipline, but not as many surprise exits or non-renewals. Happy to discuss how this plays out locally. Would be interested in hearing what you're seeing on the ground, are quotes getting easier or still coming in hot?

I’ve been seeing a lot of concern in the investor space lately about aggressive rate increases at renewal and the unpredictability of insurance quotes. If that’s been your experience, this industry update is worth paying attention to.

AM Best’s updated reporting shows that the U.S. Property & Casualty insurance industry ended 2024 with a $22.9B underwriting profit—its first since 2020. That’s a sharp revision from the $2.6B loss initially published in February. (Feb. 2025, March 2025)

So what changed?

Personal lines performance drove the shift. Auto insurance, in particular, corrected hard, with the combined ratio dropping from 104.9 to 98.7. Combined ratio is equal to (Incurred Losses + Expenses) / Earned Premiums.
Rate hikes and tighter underwriting had a real effect. Carriers across the board repriced risk more aggressively, especially in personal and small commercial lines.
Catastrophe losses remained high ($76B+), but overall loss ratios improved enough to swing the industry into the black.

Why this matters for investors:

Underwriting profit is a signal that the industry is stabilizing. We may see a slower pace of premium increases heading into late 2025 - but don’t expect rollbacks.
Carrier appetite may loosen, particularly for mid-market rental and rehab properties that were previously borderline. This could help investors navigating tough markets like FL and CA.
Insurers will still favor clean risk. Properties with updates, clean loss runs, and stronger maintenance records will continue to get the best treatment.

There’s still volatility, especially in catastrophe-prone zones, but we’re not in the freefall that defined 2022–2023.

If you’re underwriting deals this year, factor in that insurance markets are moving, but the hard market isn’t over. Expect pricing discipline, but not as many surprise exits or non-renewals.

Happy to discuss how this plays out locally. Would be interested in hearing what you're seeing on the ground, are quotes getting easier or still coming in hot?

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