Stability in U.S. Property/Casualty Insurance Industry Despite Challenges

U.S. Property/Casualty Insurance Industry Maintains Stability Amid Challenges

The U.S. property/casualty (P/C) insurance industry demonstrated remarkable resilience in 2025, achieving its lowest Net Combined Ratio (NCR) in over a decade, as reported by the Insurance Information Institute (Triple-I) and Milliman. Despite challenges such as the Los Angeles wildfires and ongoing geopolitical uncertainties, the industry showcased its strength. However, forecasts suggest potential challenges ahead due to anticipated market softening and broader economic trends.

Dr. Michel Léonard, Chief Economist at Triple-I, highlighted that while the overall economy and P/C sector appear stable, underlying vulnerabilities persist due to political and geopolitical risks. Predictions for 2026 indicate rising P/C replacement costs, which could affect performance. An increase in unemployment rates may also indicate looming economic contraction risks, impacting both payers and providers within the sector.

Triple-I's Chief Insurance Officer, Dr. Patrick Schmid, commented on projections of achieving the most favorable NCR in over a decade, supported by a mild hurricane season and robust homeowners insurance performance. Growth in personal lines premiums enhances the outlook for both personal and commercial insurance lines, crucial for industry stakeholders focusing on risk management and regulatory compliance requirements.

General Liability continues to face challenges, as emphasized by Milliman's Jason B. Kurtz, FCAS, with 2025 NCR projections similar to those of 2024. Despite high loss ratios recorded in the third quarter, the sector anticipates improvement, but maintaining profitability will need ongoing premium growth to align with loss trends, which remains a critical issue for carriers and underwriters.

The Workers' Compensation sector shows favorable trends through 2025, with stable premium levels contributing to sound risk management strategies. Donna Glenn, Chief Actuary at NCCI, notes declining loss ratio trends, with modest decreases anticipated, despite state-level rate variations and developments that carriers need to monitor closely for regulatory compliance.

About Triple-I and Milliman

The Insurance Information Institute (Triple-I), under The Institutes, provides data-driven insurance insights, with its membership representing approximately half of U.S. P/C premiums. The Institutes are dedicated to advancing risk management and insurance education and innovation.

Milliman, established as an independent firm since 1947, offers actuarial and consulting services to both the public and private sectors. Their expert solutions address challenges such as market volatility and extreme weather impacts, crucial for industry-wide regulatory compliance and financial stability.

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