The US inland marine insurance market continues to post stronger underwriting results than the wider property and casualty (P&C) insurance sector, although insurers are facing limited premium growth and increasing competition, according to AM Best, a global credit rating agency and provider of insurance industry data and analysis.
AM Best’s latest Best’s Market Segment Report, Inland Marine Profitability Remains a Hallmark as the Risk Landscape Evolves, examines the factors supporting the segment’s performance and the challenges that could affect future growth.
The specialist nature of inland marine insurance remains central to its profitability, AM Best said. The coverage typically applies to property and goods being transported over land, as well as inventory held away from its usual premises. The range of risks involved means insurers require specialist underwriting expertise, which has helped the segment maintain a relatively strong performance compared with the broader P/C market.
AM Best reported that inland marine insurers have consistently achieved lower calendar-year loss and loss adjustment expense (LAE) ratios than the wider P&C industry. Over each of the past four years, the difference has been more than 20 percentage points.
Performance improved further in 2025, with the segment recording its lowest loss and LAE ratio in 11 years. “As good as inland marine’s underwriting performance has been historically, it was even better in 2025, when the line’s loss and LAE ratio reached an eleven-year low,” added Christopher Graham, Senior Industry Analyst, AM Best.
The coverage extends beyond property in transit. AM Best said inland marine policies can also protect materials and equipment at construction sites, along with specialist high-value property such as fine art, computers, television, video and sound equipment, and medical diagnostic equipment.
Historically, the market has been weighted towards commercial risks, which account for around 80% of exposure, with the remaining 20% relating to personal inland marine business. Commercial policies can cover freight and property while in transit, while personal cover can apply to items such as jewellery, fine art and collectibles. AM Best also noted that pet insurance was previously included within the inland marine segment before becoming a separate line in 2024.
Construction activity is an important indicator for the sector because inland marine policies can cover materials held at construction sites. AM Best said overall US construction spending has eased slightly from its 2024 peak, potentially reducing the volume of construction-related risks requiring insurance.
Lower construction activity could therefore weigh on demand for inland marine cover. At the same time, fewer projects may encourage insurers to compete more aggressively for available business, potentially placing pressure on rates and pricing.
AM Best also pointed to changes in the competitive structure of the market. The leading insurers now hold a smaller proportion of the inland marine market than they did five years ago, reflecting a more competitive environment.
The slight rise in concentration among the groups represented in the segment’s top 10 in 2024 was largely linked to pet insurance being separated into its own line of business, rather than a material increase in market share for the largest inland marine insurers, according to AM Best.
Despite these pressures, AM Best’s assessment suggests inland marine remains one of the stronger-performing areas of the US P&C insurance market. However, insurers are likely to face a more challenging growth environment as construction activity moderates, competition increases and opportunities for meaningful premium expansion remain limited.
