Fitch Maintains Neutral Outlook for U.S. Property/Casualty Insurance Sector in 2026

Fitch Ratings has released its 2026 outlook for the U.S. property/casualty (P/C) insurance sector, maintaining a neutral fundamental view for both commercial and personal lines. The sector enters 2026 on solid footing, underpinned by strong statutory performance, favorable results from personal auto insurance, a mild hurricane season, and increased reserve releases. Fitch expects the industry's combined ratio to improve by nearly three percentage points in 2025 to 93.7%, with adjusted statutory net earnings projected to increase relative to 2024, excluding extraordinary investment gains from Berkshire Hathaway. Looking ahead to 2026, Fitch anticipates stable overall industry performance with a slightly lower underwriting profit. The combined ratio is forecasted to range between 96% and 97%, supported by continued strong results across both personal and commercial lines despite challenges to top-line growth. Fitch highlights ongoing macroeconomic risks including increased competition, geopolitical uncertainty, slower economic growth, and a challenging legal environment, which may impact pricing discipline, reserve adequacy, and claims management within the sector. Declining interest rates are expected to modestly pressure net investment income, although book yields are projected to remain strong. Fitch forecasts the adjusted industry return on surplus (ROS) at 10.1% in 2025, decreasing to 9.1% in 2026. This reflects the sector's capacity to navigate economic headwinds while capitalizing on favorable market conditions. Fitch’s outlook underscores the sector's resilient underwriting fundamentals and balanced risk profile heading into 2026. Industry stakeholders should monitor evolving regulatory, economic, and litigation environments as they continue to influence insurer operational strategies and financial performance. The stable outlook provides an important context for insurers’ capital management, pricing strategies, and claims handling approaches amid a complex market landscape. Fitch Ratings is a recognized credit rating agency providing detailed sector forecasts and analysis that inform insurance professionals and market participants. The 2026 U.S. P/C insurance sector outlook is accessible through Fitch’s official channels for industry stakeholders seeking comprehensive insights.