Triple-I/Milliman: P/C Insurance Industry Poised for Growth and Underwriting Profitability in 2025 Despite Geopolitical and Natural Catastrophe Uncertainties

Business Wire

MALVERN, Pa.--(BUSINESS WIRE)--
The U.S. property/casualty (P/C) insurance industry is projected to grow faster than the overall economy in 2025 and is on track to achieve underwriting profitability for a second consecutive year, according to Insurance Economics and Underwriting Projections: A Forward View from the Insurance Information Institute (Triple-I) and Milliman, a collaborating partner.

The report, presented at a members-only briefing Thursday, noted cautious optimism in economic results, pending major shifts in monetary or public policy. “P/C economics and the U.S. economy have outperformed expectations in 2025,” said Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I. “Even though the tariffs’ impact is less severe than originally expected, the question remains whether the full negative impact has been avoided or simply pushed back to 2026.

“The P/C industry is benefiting from stronger-than-expected underlying growth, pushing premium volume up, and replacement costs that remain below overall inflation,” Léonard added. “But ongoing risks, including tariffs, labor market softening, and persistent inflation, make the 2026 outlook especially important to monitor.”

The P/C industry achieved underwriting profitability in 2024 for the first time since 2020. Profitability is expected again in 2025, though to a lesser extent.

Highlights of the Briefing

GDP is expected to grow 1.6% in 2025, below the Federal Reserve’s target.
P/C underlying growth projected at 2.4%, exceeding GDP.
P/C replacement costs are projected to rise from 1.4% in 2024 to 2.2% in 2025, below overall inflation and better than January forecasts.
Interest rate cuts are expected to take about 12 months to reduce mortgage rates, with housing starts projected to accelerate in 2026–2027.
Homeowners 2025 net combined ratio (NCR) forecast improved from prior estimate but is still expected to be unprofitable for the year.
Personal auto 2025 NCR forecast slightly improved from prior estimates and is on track to achieve continued profitability.
General liability NCR is the only major line forecasted to stay above 100 NCR in the near term.

“Favorable second-quarter results for homeowners helped narrow the anticipated 2025 gap between personal and commercial lines performance created by the Los Angeles fires in the first quarter,” said Patrick Schmid, Ph.D., chief insurance officer at Triple-I. “Net written premium growth for personal lines is expected to remain higher than commercial lines by one point in 2025, but is projected to converge by 2027.”

Jason B. Kurtz, FCAS, MAAA, principal and consulting actuary at Milliman, added general liability (GL) continues to face long-term challenges.

“We see underwriting losses continuing in 2025, with the 2025 net combined ratio for GL forecast at 107.1. Direct incurred loss ratios through mid-2025 have not improved relative to 2024’s poor result. Forecasted net written premium growth of 8.0% is 4.8 points above 2024 as premiums respond to recent performance,” he said. “While we expect slight improvement in 2026-2027, we estimate GL combined ratios to remain above 100.”

Workers’ compensation remains the strongest-performing major line in the P/C industry. Preliminary 2025 results from NCCI show calendar year combined ratios in the range of 85–93. Donna Glenn, chief actuary at NCCI, noted, “If this holds, it will represent 12 consecutive years of combined ratios under 100 for private carriers.”

About the Insurance Information Institute

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 global not-for-profit comprising diverse affiliates that educate, elevate and connect people in the essential disciplines of risk management and insurance. Through products and services offered by The Institutes’ nearly 20 affiliated business units, people and organizations are empowered to help those in need with a focus on understanding, predicting and preventing losses to create a more resilient world.

The Institutes is a registered trademark of The Institutes. All rights reserved.

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. For further information, visit www.milliman.com.