Ratings Trending Upwards in 2025
OLDWICK – OCTOBER 21, 2025 09:23 AM (EDT)
Issuer Credit Rating (rating) upgrades on U.S. property/casualty (P/C) insurers ticked upward slightly in the first half of 2025 at 18 compared with the same prior-year period, while the number of downgrades held steady at 20, according to a new AM Best special report.
The Best’s Special Report, titled, “US Property/Casualty: Similar Numbers of Upgrades and Downgrades in First Half 2025,” notes that rating affirmations were the most common action taken, comprising 80% of ratings actions taken on P/C insurers in the first half of 2025.
According to the report, carriers across the industry continue to experience the impact of inflation and rising reinsurance costs. “In recent years, personal lines’ writers, especially homeowners’ insurers, have also had to contend with high catastrophe losses and more severe secondary perils, with higher reinsurance costs and attachment points adding to the burden,” said Helen Andersen, industry analyst, AM Best.
Commercial lines carriers have been well-positioned to navigate headwinds such as economic and social inflation by consistently reporting solid underwriting performance and reserve development, as well as positive pricing momentum and underwriting discipline. In the first half of 2025, 13 commercial lines segment ratings were upgraded and seven were downgraded, versus 10 upgrades and seven downgrades in 2024.
Among the report’s other highlights:
- AM Best assigned 17 initial ratings in the first half of 2025, accounting for 5.2% of rating actions, compared to 15 in the same period last year. The majority of initial ratings were in the commercial lines segment.
- The majority of the 2025 rating downgrades were on carriers in the homeowners or personal property segments, reflecting heightened catastrophe losses, more frequent, severe secondary perils, as well as higher reinsurance costs and retentions.
- Just under a third (30%) of rating downgrades were due to poor operating performance, as outsized losses due to weather and inflation caused volatility in results over the past few years.
To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=359119.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.
