California’s historic wildfires led the insurance industry to rack up its worst Q1 cat loss ratios in several years, according to data compiled by Insurance Insider US, but the damage was not felt equally across all carriers.
The mean cat loss ratio for 17 publicly traded insurers examined by this publication was 6.0% for Q1 2025, the highest that number has been since 2021 when it sat at 7.3%. In dollar terms the cat loss toll that year was lower, but there is far more premium in the system right now after major rate rises to absorb cat losses.
For context, that was the year Winter Storm Uri swept through major portions of the US. The storm saw unusual freeze events hitting Texas, Georgia and other areas unused to low temperatures and snow.
That quarter, the median loss ratio for the 17 companies was 7.3%, a number that’s modestly skewed by a lack of public data from Skyward, which went public in 2023.
Companies with large reinsurance and personal lines portfolios took the brunt of the losses in 2025, while those focusing on specialty lines managed to escape relatively unscathed.
Travelers was the hardest hit, with cat losses accounting for 21.2% of net earned premium for Q1 2025. That was a 14.1 percentage point jump from the prior year quarter. In its earnings report for the quarter, Travelers attributed much of the cat losses to the wildfires.
Travelers also buys its reinsurance well out in the tail, with others near the top end of the table likely to have made meaningful reinsurance recoveries to trim their net loss figures.
Liberty Mutual – a personal lines giant – suffered a more than seven percentage point rise in its cat loss ratio to 16.7%.
Chubb, whose personal lines book is focused on high-net-worth individuals, posted a 15.9% cat loss ratio, up from 4.4% in 2024. In the company’s Q1 earnings report, the effect of the wildfires was evident, as the company posted a 159.5% CoR on its North American personal P&C segment, up from 87.4% in the same period the prior year.
Its overall results were, however, a demonstration of how much earnings power there is in the broader, diversified book with a group-wide combined ratio of 95.7%.
Everest’s 13.9% cat loss ratio, an 11.6 percentage point jump, reflected its exposure to personal lines treaties – with sources estimating as much as 40-50% of the overall California wildfire loss will be ceded.
In its Q1 statement, the company said $442mn of the $461mn in cat losses for the reinsurance segment for the quarter was due to the wildfires.
Arch and The Hartford also posted cat loss ratios in the double digits for the quarter, while AIG’s totaled 9.1%. Arch has a major reinsurance book, and AIG has high-net-worth exposure via its backing of MGA PCS, a joint venture with Stone Point – again underscoring the degree to which the event impacted these segments.
The LA wildfires were the most destructive wildfires ever, with loss estimates currently pegged at around $40bn. The PCS figures after the April update stood at $35.7bn for the Palisades and Eaton fires, although these numbers tend to trend up over time and PCS figures tend to miss some elements of the loss.
There are concerns that upward pressure on construction material costs could ultimately drive the loss number higher, particularly if tariffs bite, with early signs of some upward pressure in the construction materials producer price index.
Even if that final number comes in below current estimates, the two fires will have generated the biggest insured losses of any fires in history.
Of the companies analyzed by this publication, only Selective’s cat loss ratio shrank, with a 1.6pt year-over-year reduction to 3.7%. According to its Q1 earnings report, Selective’s portfolio leaned towards commercial lines, with that sector representing 81% of net premiums written for the quarter. Sources have estimated the share of the wildfires losses taken by personal lines writers – and their reinsurers – at 80-90% of the total.
CNA also got through the quarter relatively unscathed with a cat loss that was unchanged at 3.8% for both Q1s.
The cat loss ratios of several other companies increased by small margins. These were mostly clustered in specialty markets. AFG’s cat loss ratio was 4.5%, up 2.2pts on the year, while Axis rose 2.2pts to 3.7%. That’s the same cat loss ratio as WR Berkley, which was up 2.6pts from the previous year.
Markel, which had no cat losses for Q1 2024, had its ratio come in at 3.2% for Q1 2025.
Both Axis and Markel benefited from no longer writing property reinsurance, with their exposure coming via property insurance books and likely some specialty areas like marine.
The first quarter is often a quiet one for cat losses, as seen by median cat loss ratios of 3.1% in both 2022 and 2023, and 2.3% in 2024.
However, the California wildfires and growing losses from SCS are further proof that secondary perils are no longer quite so secondary.
SCS activity in March 2025 was twice the average level for that month recorded over the previous five years and 2025 insured losses from SCS activity have already totaled $10bn according to Gallagher Re data.
That number, which is preliminary, is down from $13.9bn and $15.4bn posted in 2024 and 2023, respectively, but is significantly up from the $4.3bn and $4.4bn in 2022 and 2021, respectively – and above long-term averages.
It’s unclear what these losses might mean for Q2 and the rest of the year, though there are foreboding signs on the horizon.
This past weekend, parts of the US were struck by extreme weather, with one industry analyst predicting they could account for $5bn in SCS losses, making them the costliest severe weather event of 2025 so far.
While the unexpected wildfire losses may have come as a shock to the industry, one source said they believe the property market was better able to absorb them due to seven years of rate increases in the commercial sector leading up to 2025.
Q2 has historically been a costlier quarter when it comes to cat losses than Q1, and overall SCS losses have grown, albeit at an uneven rate since 2010.
There are also early indicators that the upcoming hurricane season could be particularly active, as Colorado State University has predicted above normal activity is on the horizon, forecasting 17 named storms and four major hurricanes.
As ever, the toll will be highly sensitive to the tracks taken by particular storms, but the forecast is a reminder that there is a long way to run this year, with rates in E&S and large account property coming rapidly off their extremely elevated 2024 levels.