Triple-I/Milliman: P/C Industry Continues to Benefit from Underlying Economic Conditions and Underwriting Profitability; Geopolitical and Natural Catastrophe Risk Anomalies Should be Watched Closely

Business Wire

General Liability and Commercial Auto Challenges Persist as Catastrophe Uncertainty Remains

MALVERN, Pa.--(BUSINESS WIRE)--
The U.S. property/casualty (P/C) insurance industry is maintaining steady underwriting performance following several years of economic and underwriting volatility, with favorable results expected to continue in 2026, according to the latest members-only webinar Insurance Economics and Underwriting Projections: A Forward View from the Insurance Information Institute (Triple-I) and Milliman.

P/C underlying growth, a key driver of new business premium volume, is expected to outpace GDP in 2026 and 2028, but to drop below overall growth in 2027. P/C replacement costs are expected to increase at a slower pace than overall inflation in 2027 before outpacing it in 2028. Triple-I expects the Fed to move forward with a tightening cycle throughout 2027, resulting in a slowdown in gross domestic product and P/C underlying growth in 2027 and 2028, especially for homeowners insurance. Geopolitical risk remains elevated even though inflationary contagion from oil prices did not worsen drastically in the last three months. This may change once winter energy demand increases.

“Our latest economic outlook points to greater stability for the P/C industry, but with a temporary slowdown in 2027,” said Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I. “While underlying economic conditions remain supportive, monetary policy, replacement costs and geopolitical uncertainty will continue to shape the industry’s growth trajectory through 2028.”

The industry’s 2026 net combined ratio (NCR), a key measure of underwriting performance, is forecast at 94.0. A combined ratio below 100 indicates an underwriting gain, while a ratio above 100 indicates an underwriting loss. Annual net written premium (NWP) growth for commercial lines is expected to outpace personal lines by approximately 3 percentage points over 2026-2028.

Key Highlights

Homeowners underwriting results remain strong following several years of elevated loss costs. Preliminary loss estimates from Hurricane Isaias are unlikely to change the profitability picture materially, though Isaias is a reminder the Atlantic Basin hurricane season runs through Nov. 30 and there may be storms that materially affect homeowners underwriting.
Personal auto premium growth is slowing considerably.
General liability and commercial auto remain the most challenged lines amid persistent claims-cost pressures.
Workers’ compensation continues its long run of strong underwriting performance.

“While underwriting results have improved, they need to be viewed in the context of several years of elevated loss costs and significant catastrophe losses,” said Patrick Schmid, Ph.D., chief insurance officer at Triple-I. “Performance also varies considerably by line. Against that backdrop, maintaining underwriting strength is critical to ensuring insurers have the financial capacity to pay claims, absorb future catastrophe losses and support the availability of coverage.”

Homeowners NWP growth is forecast at 6.4% in 2026, the lowest growth rate since 2020. The 2026 first half direct incurred loss ratio of 49% was the best H1 result in more than a decade. The improvement also reflects lower catastrophe losses compared with the first half of 2025, when the Los Angeles wildfires significantly affected homeowners results. Despite the improvement, homeowners results remain highly sensitive to natural catastrophe activity, which can cause substantial changes in underwriting results from one quarter or year to the next.

Personal auto NWP growth is forecast at -0.6% in 2026, 4.6 percentage points lower than 2025 and the second-lowest annual growth rate in more than 15 years, behind only 2020. The line’s 2026 NCR is forecast at 95.5.

“General liability and commercial auto continue to present the greatest underwriting challenges, reflecting persistent loss-cost pressures,” said Jason B. Kurtz, FCAS, MAAA, principal and consulting actuary at Milliman. “We expect net combined ratios for both lines to remain above 100, although commercial auto quarterly loss ratios are showing early signs of improvement.”

For workers’ compensation, the 2026 NCR is forecast at 92.7, marking the 12th consecutive year with an underwriting gain. NWP growth is forecast at -0.7% in 2026 with premium levels remaining relatively flat for 2027 and 2028.

“After looking at loss costs, payroll, and the direct written premium change for the first half of 2026, overall 2026 net written premium is likely to be slightly lower than premium levels for 2025,” said Donna Glenn, chief actuary and product officer at NCCI. “These results and more are now available in our latest report, State of the Line—The Latest Results in 2026.”

About the Insurance Information Institute (Triple-I)

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 not-for-profit dedicated to helping people and organizations succeed in the essential disciplines of risk management and insurance. Through numerous affiliated business units and brands, we educate, elevate, and connect students, professionals, and organizations by equipping them with the knowledge, skills, and collaboration they need to tackle the most complex risk management and insurance challenges. Backed by more than 115 years as a trusted knowledge partner, we empower people and organizations to create a more resilient world.

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.