A report from credit agency AM Best highlights the resilience of US property/casualty mutual insurers, saying the segment recorded a significant improvement in financial results during 2025.
US property/casualty mutual insurance organisations rated by AM Best – a supporting member of the
International Cooperative and Mutual Insurance Federation (Icmif) – saw net income more than double year on year to US$42.6bn in 2025, according to the latest Best’s Market Segment Report, Mutual Insurers Resilient Despite Competitive Pressures.
The improvement was driven in part by a return to underwriting profitability, the report says. The composite recorded an underwriting gain of US$14.8bn in 2025, compared with a US$7.2bn underwriting loss in 2024. Investment income of more than US$20bn in both years also supported overall results.
AM Best attributed the improved underwriting performance partly to actions taken by mutual insurers in response to post-pandemic inflation, including significant rate increases, restructuring discounts and raising deductibles. The report also notes the growing contribution of data analytics, enhanced technology and risk modelling to risk pricing and rate adequacy.
Despite the improvement in overall results, mutual insurers continued to face pressure from secondary perils, including wildfires, localised flooding and severe convective storms. The report notes that the composite avoided large-scale hurricane losses in 2025 due to the relatively muted Atlantic hurricane season.
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The improved financial performance also translated into higher policyholder dividends. The policyholder dividend ratio increased in 2025, while dividends reached US$5.5bn in the first quarter of 2026, compared with US$0.5bn in the same period of 2025. Net income in the first quarter of 2026 also more than tripled year on year, although AM Best notes that first-quarter 2025 results had been significantly affected by the California wildfires (pictured).
The report also highlights continued strengthening of mutual insurers’ capital positions. For the third consecutive year, AM Best-rated mutuals increased their surplus, with 2025 recording the largest year-on-year increase – US$64bn – taking total surplus to US$468bn.
Net premium growth moderated to 5% in 2025, moving closer to historical pre-pandemic averages as rates from previous years proved adequate. At the same time, social inflation continued to put pressure on mutual insurers, with casualty and liability markets hardening further.
AM Best also identifies differences between larger and smaller mutual insurers. While the larger mutuals have a substantial influence on the composite’s overall results because of their size, smaller mutuals tend to perform better on a pure loss-ratio basis.
According to AM Best, their focus on niche or local markets, strong relationships with independent agents and higher customer retention can support performance, although smaller insurers can be more exposed to weather-related volatility because of their more concentrated geographic risk.
