MALVERN, PA — U.S. property and casualty insurers are expected to maintain profitable underwriting results in 2026, but persistent claims-cost pressures in general liability and commercial auto insurance are projected to produce continued underwriting losses in those segments, according to new forecasts from the Insurance Information Institute and actuarial consulting firm Milliman.
The industrywide net combined ratio is projected at 94.0 for 2026, indicating that insurers are expected to spend approximately 94 cents on claims and underwriting expenses for every dollar of premium earned.
A combined ratio below 100 indicates an underwriting profit, while a ratio above that threshold signals an underwriting loss.
The forecast reflects improved performance in homeowners and personal auto insurance, alongside continued profitability in workers’ compensation. General liability and commercial auto remain the industry’s weakest major segments.
“We expect net combined ratios for both lines to remain above 100, although commercial auto quarterly loss ratios are showing early signs of improvement,” said Jason B. Kurtz, principal and consulting actuary at Milliman.
The outlook also anticipates slower insurance industry growth in 2027 as higher interest rates and economic uncertainty affect demand.
Triple-I expects the Federal Reserve to pursue monetary tightening throughout 2027, contributing to slower gross domestic product growth and reduced underlying insurance demand in 2027 and 2028, particularly in homeowners coverage.
Underlying property and casualty insurance growth is projected to exceed GDP growth in 2026 and 2028 but fall below it in 2027.
Replacement costs are expected to increase more slowly than overall inflation in 2027 before accelerating relative to inflation in 2028.
Michel Léonard, Triple-I’s chief economist and data scientist, said the industry faces a temporary slowdown despite improved underwriting conditions.
“While underlying economic conditions remain supportive, monetary policy, replacement costs and geopolitical uncertainty will continue to shape the industry’s growth trajectory through 2028,” Léonard said.
The forecast projects annual net written premium growth in commercial insurance will exceed growth in personal lines by approximately three percentage points from 2026 through 2028.
Homeowners insurance has experienced a substantial improvement in underwriting performance following several years of elevated catastrophe losses and replacement costs.
The segment’s direct incurred loss ratio was 49% during the first half of 2026, its strongest first-half result in more than a decade.
That performance partly reflects lower catastrophe losses compared with the first half of 2025, when the Los Angeles wildfires significantly affected insurers.
Homeowners net written premium growth is forecast at 6.4% in 2026, its slowest annual pace since 2020.
Despite improved results, the segment remains exposed to hurricane activity and other natural disasters that can materially affect annual underwriting profitability.
Personal auto insurers face a different trend, with premium growth expected to turn negative after several years of increases.
Net written premiums are forecast to decline 0.6% in 2026, a slowdown of 4.6 percentage points from 2025 and the second-weakest annual growth rate in more than 15 years.
The segment’s projected combined ratio of 95.5 nevertheless indicates continued underwriting profitability.
Workers’ compensation remains another profitable segment, with a projected 2026 combined ratio of 92.7.
That would mark the industry’s 12th consecutive year of underwriting gains in workers’ compensation, although net written premiums are expected to decline 0.7% this year.
Premium levels are projected to remain relatively flat in 2027 and 2028.
Donna Glenn, chief actuary and product officer at the National Council on Compensation Insurance, said first-half trends in payroll, loss costs and direct written premiums suggest full-year premium volume will be slightly below 2025 levels.
The broader outlook remains sensitive to catastrophe losses and geopolitical developments, including potential increases in energy-related inflation as winter demand rises.
Patrick Schmid, Triple-I’s chief insurance officer, cautioned that improved underwriting results follow years of elevated claims costs and substantial catastrophe losses.
“Maintaining underwriting strength is critical to ensuring insurers have the financial capacity to pay claims, absorb future catastrophe losses and support the availability of coverage,” Schmid said.
The projections were presented during an Insurance Information Institute and Milliman webinar examining insurance economics and underwriting performance through 2028.
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