MALVERN, PA — The U.S. property/casualty (P/C) insurance industry is positioned to grow faster than the overall economy in 2025 and achieve a second straight year of underwriting profitability, according to Insurance Economics and Underwriting Projections: A Forward View from the Insurance Information Institute (Triple-I) and Milliman.
The joint report, presented Thursday at a members-only briefing, reflected cautious optimism amid a steady economy and manageable inflation. “P/C economics and the U.S. economy have outperformed expectations in 2025,” said Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I. “Even though the tariffs’ impact is less severe than originally expected, the question remains whether the full negative impact has been avoided or simply pushed back to 2026. The P/C industry is benefiting from stronger-than-expected underlying growth, pushing premium volume up, and replacement costs that remain below overall inflation. But ongoing risks, including tariffs, labor market softening, and persistent inflation, make the 2026 outlook especially important to monitor.”
After achieving underwriting profitability in 2024 for the first time since 2020, the P/C sector is expected to remain profitable in 2025, though to a lesser degree. The report projects GDP growth of 1.6% next year—below the Federal Reserve’s target—while P/C underlying growth is forecast at 2.4%. Replacement costs are expected to rise 2.2%, still trailing overall inflation.
“Favorable second-quarter results for homeowners helped narrow the anticipated 2025 gap between personal and commercial lines performance created by the Los Angeles fires in the first quarter,” said Patrick Schmid, Ph.D., chief insurance officer at Triple-I. “Net written premium growth for personal lines is expected to remain higher than commercial lines by one point in 2025, but is projected to converge by 2027.”
General liability continues to face profitability challenges. “We see underwriting losses continuing in 2025, with the 2025 net combined ratio for GL forecast at 107.1,” said Jason B. Kurtz, FCAS, MAAA, principal and consulting actuary at Milliman. “Direct incurred loss ratios through mid-2025 have not improved relative to 2024’s poor result. Forecasted net written premium growth of 8.0% is 4.8 points above 2024 as premiums respond to recent performance. While we expect slight improvement in 2026–2027, we estimate GL combined ratios to remain above 100.”
Workers’ compensation remains the strongest-performing major line. Preliminary 2025 results from the National Council on Compensation Insurance (NCCI) show combined ratios between 85 and 93. “If this holds, it will represent 12 consecutive years of combined ratios under 100 for private carriers,” said Donna Glenn, chief actuary at NCCI.
Triple-I and Milliman’s findings indicate a stable year ahead for insurers, driven by moderate growth and improved underwriting discipline, even as inflationary pressures and policy uncertainties linger heading into 2026.
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