Insights From Triple I’s Quarterly Report
The U.S. property/casualty (P/C) insurance industry saw improved underwriting performance in 2024, a trend expected to continue into 2025 and 2026, according to the latest Insurance Economics and Underwriting Projections: A Forward View report from the Insurance Information Institute (Triple-I) and Milliman. The outlook remains positive, barring any significant geopolitical or economic disruptions.
Economic and Underwriting Performance
Industry Growth
The P/C insurance sector’s economic growth in 2024 trailed overall U.S. GDP, with a 2.3% increase compared to 2.5% year-over-year (YOY). However, the industry is expected to outpace broader economic growth in 2025 (2.3% vs. 2.1%) and 2026 (2.6% vs. 2.0%), driven in part by a rebound in real estate activity and higher demand for homeowners and commercial property coverage.
A key milestone for the industry in 2024 was the U.S. insurance workforce surpassing three million employees.
Underwriting Improvements
The industry’s net combined ratio (NCR) is projected at 99.5 for 2024, reflecting a 2.2-point improvement from the prior year. Net written premium (NWP) growth is estimated at 9.5% YOY, with personal lines outperforming commercial lines by a nine-point margin.
Personal Lines
- Auto Insurance: The 2024 personal auto NCR of 98.8 reflects a 6.1-point improvement over 2023, with NWP growth reaching 14.0%, the second highest in more than 15 years.
- Homeowners Insurance: The 2024 NCR is projected at 104.8, an improvement despite an above-normal hurricane season.
Commercial Lines
- Commercial Property: The estimated 2024 NCR of 91.2 is 3.3 points worse than 2023, reflecting catastrophe losses, including those from Hurricane Milton, the costliest event for commercial property insurers since Hurricane Ian (Q3 2022).
- General Liability: The 2024 NCR of 103.7 is 3.6 points worse than 2023, marking ongoing deterioration in underwriting performance.
Industry Experts Weigh In
Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I, pointed to P/C replacement costs outpacing overall inflation in 2025 (3.3% vs. 2.5%), aligning with earlier projections from late 2024.
“Commercial lines continue to demonstrate better underwriting results than personal lines, but the gap is closing,” said Dale Porfilio, FCAS, MAAA, chief insurance officer at Triple-I. He noted that Hurricanes Helene (Q3 2024) and Milton (Q4 2024) had a significant impact on commercial property losses, while substantial rate increases have bolstered results in personal auto and homeowners’ insurance.
Profitability Concerns in Commercial Lines
Jason B. Kurtz, FCAS, MAAA, principal and consulting actuary at Milliman, emphasized that commercial auto remains unprofitable, with the 2024 direct incurred loss ratio through Q3 among the highest in 15 years.
General liability has also worsened, with each quarterly loss ratio in 2024 exceeding 2023 levels. Kurtz noted that these deteriorating results are prompting higher premium growth expectations for 2025 and 2026.
Emma Stewart, FIA, chief actuary for Market Reserving and Capital at Lloyd’s, attributed the general liability deterioration to legal system abuse and nuclear verdicts, compounding pre-pandemic claims trends. “If these trends continue to increase, reserves on this class can be expected to deteriorate further,” she warned.
Workers’ Compensation Outlook
Donna Glenn, FCAS, MAAA, chief actuary at the National Council on Compensation Insurance (NCCI), highlighted a moderate 6% average loss cost decrease for 2025, a shift from 2024’s more pronounced 9% reduction—the largest pre-pandemic drop.
“Payroll for 2025 will develop throughout the year due to changes in both wages and employment levels,” Glenn noted. “…[O]verall premium trends will become clearer as the year progresses.”
Looking Ahead
With personal lines showing underwriting improvement and commercial lines facing new profitability challenges, the P/C industry is poised for further premium growth and stronger performance in 2025 and 2026—contingent on economic stability and manageable catastrophe losses.
