U.S. property/casualty insurers posted a combined ratio of 89.5 in the first quarter of 2026, their strongest first-quarter underwriting result in at least 25 years, according to S&P Global Market Intelligence. Private passenger auto drove much of the resulting $22.1 billion underwriting gain, and that record profitability is the reason rate increases have stalled and price cuts are spreading across the country.
U.S. insurers earned a $22.1 billion underwriting profit in Q1 2026, more than double the $10.2 billion booked in Q1 2024, on a combined ratio of 89.5 (S&P Global Market Intelligence). All seven of the largest auto insurers each cleared $1 billion in underwriting gains. For drivers, those profits mean carriers now have room to compete on price, so shopping your policy can capture cuts that may not reach your renewal automatically.
- $22.1 billion underwriting gain in Q1 2026, the biggest first quarter in 25 years, on a combined ratio of 89.5
- Seven of the largest auto insurers each topped $1 billion in gains: Progressive, Allstate, GEICO, State Farm, USAA, Farmers and Liberty Mutual
- Auto rate increases slowed to 3.7% in 2025, down from 9.7% in 2024, per AM Best
- Full-coverage premiums fell 6% in 2025 to a $2,144 average; Insurify projects a 1% uptick to $2,158 in 2026
A $22 Billion Quarter, and What Drove It
The 89.5 combined ratio means insurers paid out about 90 cents in claims and expenses for every premium dollar collected, and the figure lands at 91.9 once policyholder dividends are counted. S&P Global Market Intelligence pegged the quarter's underwriting gain at $22.1 billion, more than double the $10.2 billion recorded in Q1 2024 and well above the inflation-adjusted $14.2 billion of the prior best first quarter in 2006.
Two consumer lines carried the result. The private passenger auto direct loss ratio came in at 60.4, while homeowners multiperil fell to 44.3 from 102.3 a year earlier, when the January 2025 California wildfires pushed home claims past every premium dollar collected. State Farm illustrates the swing: it reported a roughly $2 billion underwriting gain, a turnaround of more than $7 billion from its wildfire-driven loss in Q1 2025.
The strength reached the entire top tier of the auto market. Progressive, Allstate, GEICO, State Farm, USAA, Farmers and Liberty Mutual each booked underwriting gains above $1 billion, and Progressive alone grew net income roughly 10% to about $2.8 billion as its policy count topped 39 million. Read our breakdown of Progressive's $2.8 billion quarter for the carrier-level detail.
Why Your Premium Stopped Climbing
Record profits trace directly to the price hikes drivers absorbed in 2022 through 2024, which are now earning through against falling claim costs. AM Best data shows approved private auto rate increases slowed to 3.7% in 2025 from 9.7% in 2024, a six-point deceleration. The auto line swung to an underwriting gain of nearly $29 billion in 2025 from a loss of about $17 billion two years earlier, a roughly $46 billion reversal.
Consumers felt it. Insurify reported that full-coverage premiums dropped 6% in 2025 to a $2,144 national average, with 39 states posting declines and Wyoming, Iowa and Arkansas each cutting more than 20%. The share of drivers who call their insurance unaffordable fell from 38% in May 2025 to 32% by December 2025, according to Insurify survey data.
| Personal Line | 2024 Avg. Approved Increase | 2025 Avg. Approved Increase | Change |
|---|---|---|---|
| Private passenger auto | 9.7% | 3.7% | -6.0 pts |
| Homeowners | 13.5% | 8.3% | -5.2 pts |
Source: AM Best, average approved rate changes for U.S. personal lines, full-year 2024 versus full-year 2025. Figures reflect filed-and-approved rate activity across carriers, not the change on any single driver's policy.
Why Your Bill Can Still Go Up
Industry profit does not guarantee a cut on your renewal. Insurify projects the national full-coverage average will edge up about 1% in 2026 to $2,158, with increases likely in 35 states and declines in only 15. Where you live decides the direction: four states already average more than $3,000 a year, and Washington, D.C., tops $4,000 after a $618 jump in 2025. See how the map splits in our look at the states where rates are still rising while the rest get relief.
Repair costs are the other pressure. Cameras, radar sensors and aluminum body panels push the price of even a minor fender bender higher every year, and U.S. tariff policy threatens to lift parts costs further before the full effect reaches claim files. A driver with a recent ticket, a teen on the policy, or a vehicle in a high-theft segment can still see a higher bill even as the broad market softens.
The Bigger Picture
This quarter caps a multi-year repricing cycle rather than a sudden windfall. Carriers raised rates aggressively to catch up with the claim-severity surge that reset repair and medical costs, a shift we detailed in how inflation redefined the cost of an auto claim. With loss ratios now back near profitable levels and first-quarter catastrophe losses light, the underwriting math flipped hard in insurers' favor.
Analysts also flag what S&P called rapidly mounting competition in private auto, a sign carriers will chase market share with sharper new-business pricing in 2026. Profit at this level rarely lasts untouched, and our analysis of why auto insurance profitability sits at a 15-year high lays out the three risks, from tariffs to casualty-claim inflation, that could end the run.
What You Should Do Now
A softening market rewards drivers who move, not those who wait for a renewal letter. Carriers price new customers more aggressively than existing ones, so the savings often sit with the policy you do not have yet.
Re-Shop 3 to 4 Weeks Out
Pull your current premium and renewal date, then quote competitors before the policy auto-renews. Timing matters, as our guide to the best time to shop for car insurance explains.
Compare At Least Three Carriers
Quote two national insurers and one regional carrier on identical coverage limits. With 39 states cutting prices in 2025, the spread between the cheapest and priciest quote can run several hundred dollars.
Ask About New Discounts and the Loyalty Trap
Request telematics, bundling and pay-in-full discounts, and check whether staying put is costing you, a pattern documented in our report on when loyalty raises your premium.
Looking Ahead
Insurify expects 2026 to bring stabilization rather than another round of double-digit hikes, with the national average rising just 1% to $2,158. Record policyholder surplus plus intensifying competition give carriers the capacity to keep cutting, especially for clean-record drivers in the 15 states already projected to see declines.
The wildcard is cost: tariff-driven parts inflation and rising attorney involvement in injury claims could squeeze the margins that make today's price cuts possible. Watch second-quarter results due in August 2026, because a weaker combined ratio would be the first signal that the rate-cut window is closing.
Frequently Asked Questions
Rate filings lag results, and your state, vehicle and driving record matter more than the national average. Insurify projects increases in 35 states for 2026 even as the industry posts a $22.1 billion quarterly profit, so a price cut in one state does not reach a driver in another. Shopping competitors is the fastest way to test whether the market has moved on your specific profile.
For many drivers, prices will hold roughly flat. Insurify projects the national full-coverage average will rise about 1% to $2,158 in 2026, with declines expected in 15 states and increases in 35. That follows a 6% drop in 2025, so the steep relief of last year is unlikely to repeat nationwide.
All seven of the largest personal auto carriers posted underwriting gains above $1 billion in Q1 2026: Progressive, Allstate, GEICO, State Farm, USAA, Farmers and Liberty Mutual. State Farm swung to roughly a $2 billion gain, a more than $7 billion improvement from its wildfire-hit first quarter of 2025.
Not automatically. Some mutual insurers return money through policyholder dividends, which already pulled the industry combined ratio from 89.5 to 91.9 in Q1 2026, but most carriers pass savings through lower renewal rates or sharper new-business pricing instead. Ask your insurer directly whether a dividend or rate reduction applies to your policy.
Quote at least three carriers on identical coverage three to four weeks before your renewal, since insurers price new customers more aggressively than loyal ones. Add telematics or bundling discounts where available, and compare a regional carrier against the national brands, because 39 states recorded price cuts in 2025.
- Insurance Journal - US P/C Insurers Post Biggest Q1 Underwriting Profit in 25 Years (S&P Global Market Intelligence data)
- Carrier Management - Q1 2026 P/C Underwriting Results
- Insurance Journal - Personal Lines Insurers Ask for Less Rate After Period of Catch-Up (AM Best data)
- Insurify - 2026 Car Insurance Report and Price Projections
- Insurify via PR Newswire - Car Insurance Costs Projected to Reach $2,158 in 2026