Insurance Companies Posted Their Strongest Quarter in 25 Years—Consumers Aren’t Sharing the Gains

The U.S. property and casualty insurance industry just recorded its best quarter in at least 25 years. S&P Global Market Intelligence indicates a combined ratio of 89.1 in Q3 2025, a profitability level the industry doesn’t often reach. In fact, according to analysts Tim Zawacki and Husain Rupawala’s recent report “For U.S. P/C insurers, it just doesn’t get any better than this,” the number is the lowest on record over 98 quarters, dating back to 2001.

For context, a combined ratio typically measures how much an insurance company pays out in claims and expenses relative to how much it collects in premiums. A ratio below 100 means the insurer is likely making a profit. Therefore, a 89.1 combined ratio is exceptionally low, and means that insurers are keeping more dollars than they spent.

Surprisingly, despite the successful and historic margins, policyholders are still facing rising premiums, restrictive underwriting, and frustrating claims experiences.

What fueled the rise in insurance profits?

Several advantageous conditions aligned at once, all of which contributed to the insurance industry’s successful performance. For one, there were fewer catastrophic events, meaning less hurricanes, wildfires, and severe storms. There was also favorable reserve development.

Insurers benefit from reserve development when setting aside more money than they ultimately need to pay in claims. When the funds are released, they come back into the company as profit.

Industry-wide, there was a record-setting $5.1 billion in favorable reserve development, compared to just $1.3 billion in the third quarter of 2024. Additionally, seven major U.S. P/C groups, all personal lines writers, each posted over $1 billion in underwriting gains in the third quarter. Only one large U.S. P/C Group, Everest Group, posted a sizable loss in excess of $100 million (on commercial liability lines).

Rising auto and commercial liability loss ratios, along with an uptick in workers’ compensation losses, remain pressure points for insurers, but they were not significant enough to offset the industry’s overwhelmingly favorable conditions.

How do insurer profits benefit consumer costs?

While many policyholders might expect to see lower premiums, rebates, refunds, improved services, or expanded coverage options, that’s not the case. Despite record profitability for insurers, policyholders are still facing high auto insurance bills, rising premiums, more limited options in higher-risk areas, and slower claim approvals.

For example, homeowners are receiving nonrenewal notices even in non-catastrophe years, policyholders are being forced into high-deductible products, and many drivers are paying significantly more for auto insurance despite fewer claims.

So, while insurers enjoy the financial surge, everyday people are not benefiting.

Analysts’ predictions about the future

Zawacki and Rupawala state that “slowing top-line growth, mixed macroeconomic prospects and the inevitability” that high catastrophe losses will return “create the potential that the third quarter’s result will stand for the foreseeable future as the best on record.”

Economic uncertainty, inflation, and future natural disasters could erode underwriting margins, making Q3’s success short-lived.

Consumers deserve better

Insurance companies portray themselves as companies promising support, stability, and peace of mind. But their financial returns suggest an interest in maximizing profit, even when risk is low, and consumers are struggling.

If you’ve ever tried to recover compensation from an insurance company after a serious injury, you know how frustrating the process can be. At Plattner Verderame, we have decades of experience standing up for policyholders whose insurers don’t honor their obligations. If your claim has been mishandled or completely ignored, our attorneys are prepared to help you fight for your rights and pursue the compensation you’re owed.

Contact us today for a confidential consultation.