U.S. property and casualty insurers just posted their best underwriting year in decades, recording a $60.9 billion net profit in 2025. Even so, insurers are increasingly under pressure to improve profitability at a time where the cost of insuring people and assets is harder to predict.
A combination of inflation, geopolitical shocks and climate volatility has made insurance pricing highly unpredictable, according to Arthur J. Gallagher & Co., a prominent insurance brokerage. As risk becomes more complex, segment-based pricing can hide individual policy risks. Two policies that look similar on paper and sit within the same risk segment can produce very different financial outcomes for an insurer.
