Triple-I/Milliman: Amidst Economic and Geopolitical Uncertainties, 2025 U.S. P/C Market Demonstrated Resilience; Lower Nat Cats in Q3/4 Helpful

2026 May Prove More Challenging with Market Softening and Lingering Economic Trends

MALVERN, Pa.–(BUSINESS WIRE)–The U.S. property/casualty (P/C) insurance industry exhibited resilience in 2025 and is forecast to have its lowest Net Combined Ratio (NCR) in over a decade. This comes despite the Los Angeles wildfires in January 2025, ongoing tariffs, and other geopolitical risks entering the fray. These findings are detailed in P/C Economics and Underwriting Projections: A Forward View from the Insurance Information Institute (Triple-I) and Milliman, a collaborating partner.

“Overall, the P/C insurance industry and the broader U.S. economy remain stable,” said Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I. “However, despite stronger-than-expected GDP growth in the third quarter, a closer look at the data suggests the U.S. economy may be increasingly vulnerable to rising economic, political, and geopolitical uncertainty. In particular, P/C replacement costs could still see significant increases in 2026, weighing on overall P/C performance.” Léonard added that a rise in the unemployment rate toward the critical 5.0% level over the next six months could trigger an economic contraction or even a recession.

Key Highlights:

• The collection of economic data was impacted by the U.S. government shutdown in Q4 2025, leading to data delays and gaps. Available economic data points to P/C underlying growth slowing, particularly for premium volume. Additionally, political and geopolitical risks are increasing.
• P/C Aggregate Net Premium Growth across all P/C lines for 2025 is expected to be 5.9%, further slowing relative to 2024’s growth rate.
• Homeowners’ 2025 Net Combined Ratio is forecast at 99.6 points, on par with 2024 despite losses from the Los Angeles fires in Q1 2025
• Personal Auto’s 2025 Net Combined Ratio is forecast at 94.4 points, an improvement from 2024, while Net Written Premium Growth is expected to have slowed to 3.6%, the lowest level since 2020.
• General Liability and Commercial Auto are the only major lines forecast to remain above a Net Combined Ratio of 100 points, though gradual improvements are expected for both lines in 2026–2027.
• Workers’ Compensation continues to perform strongly, with Net Combined Ratios forecast to range from high 80s to low 90s in 2025-2027.

“We’re on track to achieve the lowest Net Combined Ratio in over a decade, thanks in part to a hurricane season that spared the U.S. and strong homeowners performance, even after the Los Angeles fires in Q1 2025,” said Patrick Schmid, Ph.D., chief insurance officer at Triple-I. “Growth in personal lines premiums remains solid, and the narrowing gap between personal and commercial lines performance points to a cautiously optimistic outlook for the industry.”

Jason B. Kurtz, FCAS, MAAA, principal and consulting actuary at Milliman, added, “General Liability faces continued challenges. Our 2025 Net Combined Ratio is forecast to be similar to 2024, among the worst in over a decade. Losses are high, with Q3 direct incurred loss ratios being the highest in at least 25 years,” he said. “While conditions may improve in 2026-2027, profitability remains a hurdle. Our General Liability’s NCR expectations have risen following a challenging Q3, reflecting ongoing pressure in the segment. While some coverages are experiencing soft market conditions, aggregate premiums have been growing, but not enough to keep pace with loss trends. We anticipate additional premium growth will be needed to improve General Liability profitability.”

Workers Compensation is expected to continue delivering favorable underwriting results through 2025, supported by stable Net Written Premium trends, disciplined risk management, and favorable prior accident year development. “NCCI’s latest loss ratio trends continue to show declines,” said Donna Glenn, NCCI chief actuary. “In the current environment, modest year-to-year decreases are still expected.” Glenn noted that “while there have been a few rate increases filed in NCCI states, every state has its own story, and based on the latest data, NCCI does not anticipate any imminent reversal of current trends.”

About the Insurance Information Institute

Since 1960, the Insurance Information Institute (Triple-I) has been the trusted voice of risk and insurance, delivering unique, data-driven insights to educate, elevate, and connect consumers, industry professionals, policymakers, and the media. An affiliate of The Institutes, Triple-I represents a diverse membership accounting for nearly 50% of all U.S. property/casualty premiums written. Our members include mutual and stock companies, personal and commercial lines, primary insurers, and reinsurers – serving regional, national, and global markets.

About The Institutes

The Institutes® are a global not-for-profit comprising diverse affiliates that educate, elevate and connect people in the essential disciplines of risk management and insurance. Through products and services offered by The Institutes’ nearly 20 affiliated business units, people and organizations are empowered to help those in need with a focus on understanding, predicting and preventing losses to create a more resilient world.

The Institutes is a registered trademark of The Institutes. All rights reserved.

About Milliman

Milliman leverages deep expertise, actuarial rigor, and advanced technology to develop solutions for a world at risk. We help clients in the public and private sectors navigate urgent, complex challenges—from extreme weather and market volatility to financial insecurity and rising health costs—so they can meet their business, financial, and social objectives. Our solutions encompass insurance, financial services, healthcare, life sciences, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. For further information, visit www.milliman.com.

Contacts

Triple-I: Loretta Worters, lorettaw@iii.org
Milliman: Jeremy Engdahl-Johnson, jeremy.engdahl-johnson@milliman.com