The US property/casualty (P/C) insurance industry is set to grow faster than the national economy in 2025, supported by stronger-than-expected premium growth and contained replacement costs, according to the Insurance Information Institute (Triple-I) and Milliman.
However, ongoing economic risks tied to tariffs, inflation, and labor conditions could affect next year’s performance.
Triple-I chief economist and data scientist Michel Léonard said the industry and the overall economy “have outperformed expectations in 2025.” He added that while the effect of tariffs has been less severe than expected, it remains uncertain whether the full impact has been avoided or delayed until 2026.
Triple-I’s Insurance Economics and Underwriting Projections: A Forward View, presented during a members-only briefing, outlined that the P/C sector is on track to maintain underwriting profitability for a second straight year following its first profitable year since 2020. Profitability in 2025 is expected to be lower than in 2024.
The report forecasts the country’s GDP to grow 1.6% in 2025, while P/C underlying growth is projected at 2.4%. Replacement costs are expected to rise from 1.4% in 2024 to 2.2% in 2025, remaining below overall inflation.
Patrick Schmid, Triple-I’s chief insurance officer, said improved homeowners’ results during the second quarter helped narrow the gap between personal and commercial lines caused by the Los Angeles fires earlier in the year. Personal lines are forecast to post higher net written premium growth than commercial lines by one point in 2025, with convergence projected by 2027.
Jason Kurtz, principal and consulting actuary at Milliman, said general liability continues to face underwriting losses. He noted the 2025 combined ratio for general liability is forecast at 107.1, with direct incurred loss ratios through midyear showing little improvement from 2024. Net written premium growth is projected at 8%, up 4.8 points from last year.
Workers’ compensation remains the strongest-performing line, with combined ratios ranging from 85–93 for 2025, according to preliminary data from the National Council on Compensation Insurance (NCCI).
NCCI chief actuary Donna Glenn said if the estimates hold, this will mark the twelfth consecutive year of ratios under 100 for private carriers.
Recent industry analyses align with Triple-I and Milliman’s outlook. Data from S&P Global showed the industry recorded its lowest second-quarter statutory combined ratio in 18 years at below 94.2%, compared with 101.2% a year earlier. The net underwriting profit reached $12.89 billion for the quarter, helped by fewer catastrophe losses and favorable reserve developments.
A separate Fitch Ratings report stated that the P/C industry posted a 96.4% combined ratio in the first half of 2025, down 1.2 points from the previous year. Fitch expects the full-year combined ratio to stay below 100% but slightly higher than 2024’s 97%, citing possible effects from tariffs, hurricane activity, and competition in the auto market.
Will the US P/C industry maintain its profitability trend into 2026? Share your thoughts in the comments.
