The property and casualty insurance sector delivered a mixed earnings season in the third quarter of 2025, with strong profit beats tempered by concerns over softening prices and slowing growth, according to a sector analysis released Sunday by TD Cowen.
Across the sector, the median earnings per share beat versus consensus expectations reached 15%, yet stock prices remained flat on earnings announcements and declined 5% over the quarter, analysts led by Andrew Kligerman reported.
The market globally is “in transition,” according to Chubb CEO Evan Greenberg, noting increased competition in large account business, while middle-market and small commercial property remained “more disciplined and orderly.”
Property pricing pressure intensified during the quarter, with US rates declining 9%, according to Marsh McLennan data. Large accounts experienced more pronounced declines, while small accounts continued seeing modest but slowing rate increases. Property-catastrophe reinsurance pricing fell roughly 10%.
US casualty pricing rose 8%, down from 9% in the second quarter, as social inflation and reserve risk continued to worry investors. Everest Group reported a substantial 12.4 percentage point reserve charge on US casualty business.
Excess and surplus lines premium growth slowed to 2% year-over-year in October across California, Florida, and Texas combined, though most carriers posted mid-single-digit or higher growth. Ryan Specialty reported 15% organic growth and anticipates 20% to 30% rate reductions in the fourth quarter, primarily for larger accounts.
Personal auto insurers maintained strong profitability despite intensifying competition. Policies-in-force continued growing, while underlying loss ratios remained stable or improved versus the second quarter, signaling increased competitiveness ahead. Personal lines stocks, however, largely declined following earnings releases.
Insurance brokers faced rate pressure but demonstrated solid organic revenue growth. Arthur J. Gallagher, Aon, Marsh McLennan, and Willis Towers Watson expressed confidence in sustaining mid-single-digit growth through 2025.
The relatively subdued 2025 Atlantic hurricane season benefited third-quarter earnings but could pressure property catastrophe reinsurance rates at January 2026 renewals, analysts said. Industry expectations point to roughly 10% pricing reductions, though retentions and terms are not expected to change significantly.
TD Cowen analysts said it remains confident in brokers’ ability to sustain organic revenue growth and favor small- to mid-market underwriting exposure.
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