The US property & casualty (P&C) insurance industry is forecast to have its lowest net combined ratio (NCR) in over a decade for the full year 2025, despite the devastating California wildfires in Q1’25, supported by an Atlantic hurricane season that did not make landfall in the US.
The findings are based on Insurance Economics and Underwriting Projections: A Forward View, a recent report from the Insurance Information Institute (Triple-I) and Milliman.
The report noted that the US P&C insurance industry demonstrated resilience throughout 2025, despite significant regional catastrophes, ongoing tariffs, and other geopolitical risks.
“Overall, the P/C insurance industry and the broader U.S. economy remain stable,” said Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I. “However, despite stronger-than-expected GDP growth in the third quarter, a closer look at the data suggests the U.S. economy may be increasingly vulnerable to rising economic, political, and geopolitical uncertainty. In particular, P/C replacement costs could still see significant increases in 2026, weighing on overall P/C performance.”
Léonard added that a rise in the unemployment rate toward the critical 5.0% level over the next six months could trigger an economic contraction or even a recession.
The report highlighted that while profitability reached peak levels, top-line growth began to moderate. Aggregate P&C net premium growth across all lines for 2025 is expected to reach 5.9%, reflecting a continued slowdown compared with 2024.
Homeowners’ 2025 Net Combined Ratio is forecast at 99.6 points, on par with 2024 despite losses from the Los Angeles fires in January.
Personal Auto’s 2025 Net Combined Ratio is expected to improve to 94.4 points, while Net Written Premium growth is projected to slow to 3.6%, the lowest level since 2020.
General Liability and Commercial Auto are the only major lines forecast to remain above a Net Combined Ratio of 100 points, though gradual improvements are expected in 2026–2027.
Workers’ Compensation continues to perform strongly, with Net Combined Ratios forecast in the high 80s to low 90s through 2025–2027.
Patrick Schmid, Ph.D., chief insurance officer at Triple-I, said, “We’re on track to achieve the lowest Net Combined Ratio in over a decade, thanks in part to a hurricane season that spared the U.S. and strong homeowners performance, even after the Los Angeles fires in Q1 2025.
“Growth in personal lines premiums remains solid, and the narrowing gap between personal and commercial lines performance points to a cautiously optimistic outlook for the industry.”
Jason B. Kurtz, FCAS, MAAA, principal and consulting actuary at Milliman, added, “General Liability faces continued challenges. Our 2025 Net Combined Ratio is forecast to be similar to 2024, among the worst in over a decade. Losses are high, with Q3 direct incurred loss ratios being the highest in at least 25 years,” he said. “While conditions may improve in 2026-2027, profitability remains a hurdle. Our General Liability’s NCR expectations have risen following a challenging Q3, reflecting ongoing pressure in the segment. While some coverages are experiencing soft market conditions, aggregate premiums have been growing, but not enough to keep pace with loss trends. We anticipate additional premium growth will be needed to improve General Liability profitability.”
Workers’ Compensation is expected to continue delivering favourable underwriting results through 2025, supported by stable Net Written Premium trends, disciplined risk management, and favourable prior accident year development.
“NCCI’s latest loss ratio trends continue to show declines,” said Donna Glenn, NCCI chief actuary. “In the current environment, modest year-to-year decreases are still expected.” Glenn noted that “while there have been a few rate increases filed in NCCI states, every state has its own story, and based on the latest data, NCCI does not anticipate any imminent reversal of current trends.”
