Current U.S. tariff policies – especially those targeting materials essential for repairing and replacing property after insured events – can complicate assessing and predicting risk. The future of these policies will depend on pending court rulings, creating even more uncertainty for insurers and their customers.
This uncertainty is compounded by a paucity of federal data during the current U.S. government shutdown.
“Normally, as we wrap up Q3, we have enough data as economists, policymakers, and business leaders to start thinking about what the year will look like by the end of it,” said Dr. Michel Léonard, Triple-I Chief Economist and Data Scientist, in a recent interview with Insurance Thought Leadership (ITL) – like Triple-I, an affiliate of The Institutes. “That’s not the case right now.”
In a typical year, Léonard explained, quarter-over-quarter GDP progresses minimally, facilitating more confident quarterly projections. Ongoing trade agreement ambiguity, however, means economists are “flying blind about GDP at the moment.”
Such uncertainty also influences inventory management behaviors, as companies up and down the supply chain that rely on imported goods have decided to stockpile ahead of tariff enactments at a record pace. Though replacement costs continue to rise more slowly than overall inflation, consumers will likely face rising costs as supplies dwindle, which could disrupt the P&C insurance industry’s positive momentum heading into next year.
Personal auto performance, for instance, saw considerable improvement, but reflected consumers purchasing vehicles to circumvent later post-tariff prices, potentially leading to “less growth in the second half of the year and certainly next year,” Léonard said.
Paul Carroll, ITL editor-in-chief, added that companies may delay investing in domestic manufacturing as tariff uncertainty persists, thereby further delaying potential economic boosts. He and Léonard agreed that these factors in combination suggest the full impact of tariffs will require more time to unfold.
Despite an unclear 2026 forecast, Léonard emphasized that insurers appeared to avoid “the worst-case scenarios” this year, demonstrating a “resilient U.S. economy, both in terms of growth and inflation.”
“We’re going to end the year most likely in a better place than we expected, and we should be very happy about that,” he concluded.
A complete transcript of their discussion is available here.
By Jeff Dunsavage, Senior Research Analyst, Triple-I
Florida Gov. Ron DeSantis announced last week that state regulators have secured nearly $1 billion in premium refunds for Progressive auto insurance policyholders in the state, due to cost savings achieved through litigation reform.
DeSantis, who signed sweeping tort reform legislation bills into law in 2022 and 2023, said the refunds are a direct result of declining litigation expenses in Florida’s auto insurance market.
“Florida was really considered a litigation hellhole by a lot of folks,” DeSantis said. “That contributed to consumers having to bear more costs with respect to auto insurance.”
He pledged Insurance Commissioner Mike Yaworksy is negotiating with other major auto carriers for similar reimbursements to their customers.
Mark Friedlander, Triple-I’s director of communications, told Spectrum News Florida that reduced lawsuit expenses has enabled auto insurers to lower average costs and, in some cases, return premium to customers.
“When you take that out of the equation — all of those abusive lawsuits — this brings down the expenses, and that in turn gets passed along to the consumer,” Friedlander said. “The consumer wins with legal system reform.”
Every dollar invested in disaster resilience today can save communities up to $33 in avoided economic costs, according to new research from the U.S. Chamber of Commerce, Allstate, and the U.S. Chamber of Commerce Foundation.
Building on their 2024 finding that such investments save $13 in benefits, the report detailed the burgeoning toll of increasingly frequent and severe natural catastrophes across the United States, underscoring a need for stronger collective action to mitigate climate risk.
Invest Now, Save Later
After experiencing the fifth consecutive year of 18 or more billion-dollar disasters in 2024, the United States further drove the second costliest half-year ever for global insured losses from natural catastrophes in 2025 with January’s devastating wildfires in Southern California. Though reflecting a troubling “new normal,” the report demonstrates how resilience funding can help stabilize local economies and protect lives and jobs, regardless of the scale or type of disaster.
Modeling scenarios for five disaster types – hurricanes, tornadoes, wildfires, droughts, and floods – the study revealed that high resilience investments may cut GDP losses by billions, with reduced funding leading to significantly higher long-term costs across all scenarios.
For hurricane-prone areas, which can grapple with lasting disruptions to housing, education, and other basic infrastructure, the study noted that higher investment could prevent the loss of $13.2 billion and more than 70,000 jobs.
Emphasizing the “smart, cost-saving” efficacy of disaster mitigation, the report concluded that “preparedness is not just a safety measure – it’s a local economic development strategy.”
“Preparedness is as much about plans as it is people,” added Rich Loconte, senior vice president and deputy general counsel for government and industry relations at Allstate. “It’s supporting a local nonprofit to retain its employees and keeps its doors open after a disaster, working with civic leaders to develop recovery plans that minimize rebuilding costs, and educating community members on proactive investments that help better weather storms.”
Risk Reduction in Practice
Beyond identifying the broad impact of disaster preparedness, the report also provides actionable insights for local leaders who aim to boost community resilience but are unsure where or how to start. Recommendations for disaster preparation include:
Risk-Informed Design: Adopt and enforce hazard-resistant building codes, such as those that meet the Insurance Institute for Business & Home Safety’s FORTIFIED standards. Update zoning and land use planning according to the latest risk data.
Data-Based Decisions: Improve access to risk data to inform, track, and assess the success of disaster mitigation efforts.
Dedicated Resilience Funding:Create a local fund for disaster mitigation to ensure consistent investment and expedite post-disaster recovery.
Public Engagement: Launch risk awareness campaigns to facilitate individual and organized participation in preparedness and raise insurance take-up rates.
Stakeholder Partnerships: Coordinate cross-sector and multi-jurisdictional resilience strategies to maximize benefits.
A survey released in tandem with the report shows that most resilience stakeholders – encompassing emergency managers, community planners, government officials, and other risk experts – believe public-private collaboration needs improvement, with more than half of respondents highlighting insufficient resource allocation and unclear decision-making processes as leading causes for poor coordination.
While most indicated state and local governments must play a major role in disaster preparedness, response, and recovery, 58 percent of respondents additionally underscored the federal government as crucial at every phase, particularly for financial assistance. As numerous community resilience projects hang in limbo following the Trump Administration’s cancellation of $882 million in federal grants, it is imperative for all beneficiaries of disaster resilience to help develop sensible solutions for predicting and preventing losses.
“As the cost and economic toll of disasters continue to increase, leaders at all levels of government should know that investments in infrastructure resilience will go a long way in protecting and preparing local communities,” said Marty Durbin, senior vice president of policy at the U.S. Chamber of Commerce. “Resilience investments reduce costs and speed up recovery. The faster a community bounces back, the faster jobs and economic growth return.”
Updated industry data for the 2024 workers compensation market confirmed the line’s 11th straight year of underwriting gains, according to the recent National Council on Compensation Insurance (NCCI) report 2025 in Sight, 2024 in Review. The report – a reevaluation of preliminary analysis presented at the NCCI Annual Insights Symposium (AIS) in May – also projected continued gains in 2025.
These results were highlighted at a members-only briefing from the Triple-I and Milliman.
Prior-year figures
While net written premium fell from 2023 by 3.2 percent, workers comp private carriers enjoyed a 2024 combined ratio of 86.1 percent – a 13.9 percent underwriting gain. Such gains, combined with the 2024 investment gain of 9.8 percent, resulted in an overall operating gain of 23.7 percent, marking the eighth consecutive operating gain exceeding 20 percent and the most profitable period over at least the last three decades, the report noted.
Contrary to lower AIS estimates, lost-time claim frequency declined by 6 percent and indemnity claim severity rose by 5 percent last year. The 2024 medical claims severity estimate remains unchanged, at a 6 percent increase from 2023.
Ongoing stability
Midyear results indicate 2025 will post another profitable year, with a net premium volume similar to that of 2024. Using National Association of Insurance Commissioners (NAIC) Quarterly Statement data, NCCI reported the following findings:
Direct written premium decreased 1.9 percent through the first half of 2025, compared with the first half of 2024.
While 2025 bureau loss costs are expected to decrease by 6.1 percent, payroll through the first half of 2025 increased by roughly 5 percent over the prior year.
The private carrier direct loss ratio for the first half of 2025 is 50 percent – two points higher than the direct loss ratio during the same period of 2024.
As loss ratios at year end tend to fall slightly lower than second quarter loss ratios, the year-end 2025 net combined ratio will likely range from 85 to 93 percent.
“If this holds, it will represent 12 consecutive years of combined ratios under 100 for private carriers,” said Donna Glenn, chief actuary at NCCI.
As emerging data is collected and evaluated throughout the ratemaking season, NCCI’s initial analysis will continue to evolve. Potential economic headwinds, including recession concerns and tariff and immigration policy uncertainties, add to the unknowns. Tariffs, for instance – especially on medical equipment and pharmaceuticals, which are already subject to rising medical inflation – could further propel the costs behind workplace injury claims, making proactive risk management more imperative.
Greater insight into these trends and the overall 2025 workers comp performance will be available at the NCCI’s next AIS in May 2026.
By Jeff Dunsavage, Senior Research Analyst, Triple-I
“Risk-based pricing” is a basic insurance concept that might seem intuitively obvious when described – yet misunderstandings about it regularly sow confusion and spark calls for government intervention that would likely do consumers more harm than good.
Simply put, it means offering different prices for the same level of coverage, based on risk factors specific to the insured person or property. If policies were not priced this way, lower-risk drivers would necessarily subsidize riskier ones.
Confusion ensues when actuarially sound rating factors intersect with other attributes in ways that can be perceived as unfairly discriminatory. A new Triple-I Issues Brief sorts out the reasons for such confusion and explains why legislative involvement in insurance pricing is not the answer to rising premiums. In fact, the report says, such involvement would tend to drive premiums up, not down.
Worries about equity
Concerns have been raised about the use of credit-based insurance scores, geography, home ownership, and motor vehicle records in setting home and car insurance premium rates. This confusion is understandable, given the complex models used to assess and price risk. To navigate this complexity, insurers hire teams of actuaries and data scientists to quantify and differentiate among a range of risk variables while avoiding unfair discrimination.
Triple-I’s brief shows how one frequently criticized rating factor for auto insurance – insurance-based credit scores – effectively tracks collision claim frequency. Drivers with the worst 10 percent of scores have twice as many collision claims as the best 10 percent. The sophisticated tools actuaries and underwriters use ensure fair, accurate pricing, and insurers do everything they can to see that all valid claims are paid on time and in full.
Climate and inflation
Areas that were once less vulnerable to certain natural perils – such as wildfire and hurricane-related flooding – increasingly are being affected by these costly events. Furthermore, more people have been moving into at-risk areas on the coasts and in the wildland-urban interface (WUI), putting more property into harm’s way.
Insurance pricing must reflect these increased risks to maintain policyholder surplus – the funds regulators require insurers to keep on hand to pay claims. In some states, this increased risk – combined with regulatory decisions that make it hard to raise premium rates to the levels needed to adequately meet it – has forced some insurers to reduce their exposure and not write as many policies and even withdrawing from states completely. In these states, not only has homeowners’ coverage become less affordable – in some cases, it has also become less available.
Another factor driving up premiums is inflation. As material and labor costs rise, the cost to repair and replace damaged homes and vehicles increases. If premium rates don’t reflect these increased costs, insurers would quickly exhaust their policyholder surplus. If their losses and expenses exceed their revenues by too much for too long, they risk insolvency.
A role for governments
Policymakers naturally want to address the impact of rising costs – including insurance premiums – on their constituents. A good start would be to help reduce risk by modernizing building codes and incorporating resilience into their infrastructure investments. Reduced risk and less costly damages would, over time, translate into lower premium rates.
Governments also can work with insurers and other stakeholders to incentivize homeowners to invest in mitigation and resilience. The Strengthen Alabama Homes program is a great example of one such collaboration between state government and the insurance industry that has measurably improved results and is beginning to be imitated by other states.
By Loretta Worters, Vice President – Media Relations, Triple-I
When most people think about domestic violence, insurance isn’t usually top of mind. Yet, financial security and access to resources can determine whether someone in an abusive relationship can safely leave. Insurance—an essential part of financial planning—can play a critical role in helping survivors rebuild and move forward.
Each year, 10 million people are physically abused by an intimate partner, and nearly85 percent of women return to their abusers due to economic dependence, according to the National Coalition Against Domestic Violence (NCADV). One of the least-discussed forms of abuse within intimate partner relationships is financial abuse. It can take many forms, limiting access to assets, concealing information, ruining credit, or sabotaging employment. These tactics are designed to control, intimidate, and entrap survivors.
Research shows that financial abuse occurs in 99 percent of domestic violence cases, and access to financial resources is the top reasons survivors remain with or return to an abuser.
The Role of Insurance in Financial Recovery
Insurance can help survivors establish independence and long-term security. From home and renters coverage to auto and life policies, insurance protects survivors and their families from financial shocks that might force them back into unsafe situations.
Triple-I encourages survivors to:
Secure financial records and know where they stand financially.
Build a financial safety net.
Review and, if needed, change insurance policies to ensure they are protected.
Maintain good credit to support long-term stability.
The Allstate Foundation’s Commitment
Since 2005, The Allstate Foundation has been a leader in addressing the financial dimensions of domestic violence. Its programs focus on financial empowerment, helping survivors gain the knowledge, tools, and confidence needed to achieve independence.
Moving Ahead Workbook: A five-module program guiding survivors from short-term safety to long-term security, covering financial abuse awareness, credit basics, financial foundations, and long-term planning.
Resources for Employers: Launched in 2025 at the Forbes Power Women Summit, Allstate’s Survivor Empowerment Network equips employers with tools to support employees experiencing abuse, recognizing that the workplace can be a critical point of intervention.
“Employers have a powerful opportunity to create a place of safety and support for survivors of domestic violence,” said Sharisse Kimbro, relationship abuse program officer at The Allstate Foundation, who spoke about the financial impact of domestic violence at the 2025 Forbes Power Women Summit stage. She noted that 8 million workdays are lost to domestic violence each year.
Digital abuse is another growing threat. Abusers may monitor emails, texts, and social media, install spyware, or steal passwords, all of which can compound financial instability. As these risks evolve, financial literacy and insurance protections remain essential lifelines for survivors.
October is Domestic Violence Awareness Month. Triple-I and The Allstate Foundation spotlighted the critical role of financial empowerment and financial literacy in helping survivors build safer, more secure futures. Survivors deserve not only safety, but also the economic tools and confidence to rebuild their lives and secure a future free from abuse.
Check out these resources to learn more about the support available for survivors of domestic violence:
By William Nibbelin, Senior Research Actuary, Triple-I
The U.S. property/casualty (P/C) insurance industry is on track for a second consecutive year of underwriting profitability in 2025, and is projected to grow faster than the broader U.S. economy, according to the latest Insurance Economics and Underwriting Projections: A Forward View report from Triple-I and Milliman. The report, which is based on data through the first half of 2025, highlights continued progress despite persistent geopolitical and natural catastrophe uncertainties.
Positive Economic Signals and Lingering Concerns
The industry’s economic outlook remains cautiously optimistic. According to Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I, the industry has benefited from stronger-than-expected underlying growth. He also noted that P/C replacement costs continue to rise more slowly than overall inflation.
However, Léonard also pointed to factors that make the outlook for 2026 especially important to watch.
“Ongoing risks, including tariffs, labor market softening and persistent inflation,” could pose challenges, he said. While the impact of tariffs has been less severe than initially anticipated, their long-term effect remains an open question.
Underwriting Performance: A Mixed Bag
Overall underwriting profitability for 2025 is expected to be a repeat of 2024, but to a lesser degree. The performance gap between personal lines and commercial lines is narrowing.
“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., Triple-I’s chief insurance officer.
Schmid also noted that personal lines premium growth is expected to remain higher than commercial lines by one point in 2025. That difference is projected to disappear by 2027.
Personal Lines
Personal Auto: The personal auto sector continues to be a highlight, with its forecast 2025 Net Combined Ratio (NCR) on track for continued profitability. The forecast has also slightly improved from prior estimates.
Homeowners: Despite favorable results in the second quarter, the homeowners’ NCR forecast for 2025 is still expected to be unprofitable for the year.
Commercial Lines
General Liability: This continues to be a line of concern. According to Jason B. Kurtz, FCAS, MAAA, a principal and consulting actuary at Milliman, “We see underwriting losses continuing in 2025, with the 2025 net combined ratio for GL forecast at 107.1.” He also said that, while slight improvement is expected in 2026-2027, “we estimate GL combined ratios to remain above 100.” Kurtz added, “Direct incurred loss ratios through mid-2025 have not improved relative to 2024’s poor result. Forecasted net written premium growth of 8.0 percent is 4.8 points above 2024 as premiums respond to recent performance.”
Workers Compensation: In contrast to general liability, 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 percent. Donna Glenn, Chief Actuary at NCCI, noted, “If this holds, it will represent 12 consecutive years of combined ratios under 100% for private carriers.” For more details on the preliminary Workers Comp 2025 results, see NCCI’s full analysis in 2025 in Sight, 2024 in Review: The Latest Results for Workers Compensation.
Delving Deeper: A Members-Only View
For members who want to dig deeper into the projections, the full Insurance Economics and Underwriting Projections: A Forward View report offers a more granular analysis, including:
A detailed look at personal auto and commercial auto results, breaking down the quarterly experience between auto liability and physical damage.
A forecast of net combined ratio and net written premium growth specific to farmowners insurance.
A comparison of commercial property sub-lines.
A breakdown of commercial multiple peril results, differentiating between property and liability performance.
The next quarterly report will be presented at a members-only webinar in January 2026.
Inflation, litigation, and talent concerns are three major drivers of the specialty-lines trends the Argo Group explores in a recent report.
Labor inflation is outpacing material costs, with U.S. labor costs rising 1.42 percent year over year, compared to 0.93 percent for materials, Argo reported. This surge in labor costs affects both claims payouts and policy pricing.
“For brokers,” Argo says, “that means underpriced risks are more vulnerable than ever.”
This trend underscores the need for actuarial precision and disciplined underwriting. Long-term profitability now hinges on the ability to anticipate inflationary impacts and adjust rates proactively.
In the construction space, tariff-driven material cost spikes make claims more costly. Workers’ compensation – while still profitable – is feeling the bite of medical inflation.
Legal volatility is another growing concern. The Argo report cited a surge in “nuclear verdicts” — outsized jury awards that exceed actual damages – whose unpredictability makes risk pricing more complex and forces insurers to invest more heavily in legal expertise and claims discipline.
Stephen Perrella, Argo’s chief claims officer and a former trial lawyer, said, “In law school, you learn that our justice system is designed to make a plaintiff whole – no more, no less. But today…in many jurisdictions, verdicts far exceed actual damages.”
Perella pointed to states like Georgia and Florida, where outsized verdicts and systemic inefficiencies have triggered tort reform only after insurers began pulling out of the market.
“The problem is we’re implementing tort reform once those abuses have begun to overwhelm a just system,” he said.
For specialty insurers, talent constraints remain an operational risk.
“With large portions of the workforce retiring and a limited pipeline of experienced underwriters, claims professionals, and actuaries entering the field, competition for expertise is intense,” the report says. “That pressure is especially acute for carriers navigating complex risks and high-touch broker relationships.”
That means hiring the right people is only part of the solution. Argo emphasizes the need to build teams that work seamlessly together and develop talent that is ready for whatever comes next.
I wrapped up my first-ever Climate Week NYC last week at ClimateTech Connect. After their two-day April event in Washington, D.C., I could hardly miss this special half-day update when it was so close to home.
Fifty-plus attendees crammed a room near Grand Central Station, and I immediately spotted familiar faces and had the opportunity to meet with a mix of industry veterans and relative newbies spanning all insurance disciplines, from underwriting and claims to the cutting edge of modeling and artificial intelligence. Top insurance thought leaders and influencers were there to speak on climate-related issues of pressing interest to my industry and everyone it serves. The panel themes and the panelist themselves made it clear from the start that a blog post was not going to do the event justice.
The first panel – Pioneers Shaping the Future of Climate Resilience – was moderated by Francis Bouchard, managing director for climate at Marsh McLennan, whose bona fides include senior positions with Zurich Insurance and the Reinsurance Association of America. Francis moderated a no-holds-barred panel of young insurance leaders: Angela Grant at Palomar, Michael Gulla of Adaptive Insurance, and Valkyrie Holmes of Faura. The energy and expertise of these panelists left me feeling that the industry – in the face of myriad challenges – is being put into good hands.
The next discussion was moderated by Jerry Theodorou, a director at the R Street Institute whose professional background includes roles at Conning, AIG, and Chubb. It featured Dan Kaniewski, managing director and U.S. public sector lead for Marsh McLennan and a former FEMA deputy administrator, and Raghuveer Vinukollu, head of climate insights and advisory for Munich Re. The depth and timeliness of these three experts’ insights made for an engaging and thought-provoking session.
The third panel was both engaging and accessible – a bit surprising to me, given that it consisted entirely of PhDs. Steve Weinstein, CEO of Mangrove Property Insurance led a discussion among Joanna Syroka of Fermat Capital Management, Catherine Ansell of JPMorgan Chase, and M. Cameron Rencurrel at Mercury Insurance on not only “Why Science Needs to Be in the Boardroom,” but HOW young scientists can find their way there and decide IF that’s where they want to be.
Between these panels were presentations from representatives of several insurtechs who shared their data-driven solutions focused on understanding and addressing climate-related panels. All this in a period of about three hours (not including the networking reception afterward). Despite all the information shared, the event did not feel at all rushed.
If you weren’t able to make it and are feeling a bit left out, don’t fret! ClimateTech Connect 2026 will be held in Washington, D.C., on April 8 and 9, 2026.
Technology trends – particularly the rise of artificial intelligence – have become the top priority for global insurance executives in 2025, according to the International Insurance Society (IIS) Global Priorities Survey.
IIS – like Triple-I, an affiliate of The Institutes – found that AI has overtaken inflation as the top priority of respondents, with two-thirds now ranking AI as their leading focus for technology and innovation. Executives cite AI’s potential to streamline operations, enhance analytics, and drive new product innovation, while inflation and climate risk remain significant concerns. Operational efficiency and cybersecurity remain high on the priority list, but the narrowing gap between climate risk and technological advancement highlights the growing influence of digital priorities.
Nearly 20,000 insurance executives worldwide participated in the 2025 survey.
“These tools enhance forecasting capabilities by allowing for deeper insights into trends and potential future risks,” on executive said, characterizing the bottom-line impact of AI. “By empowering themselves with robust analytics, organizations can improve their strategic planning and risk management efforts, ultimately driving better business outcomes.”
Beyond AI, insurance executives’ emphasis on technology generally has continued to grow. Forty-one percent of respondents now view technological advancement as a top social and environmental priority, continuing its rise from only 12 percent in 2021. This increased focus reflects a desire to harness innovations ranging from machine learning tools to sophisticated cybersecurity solutions.
Other challenges also remain top-of-mind. Inflation is the highest economic priority for the fourth consecutive year, with 63 percent of respondents citing it among their top three issues. Climate risk also continues to top the social and environmental category. Concerns over an aging workforce have almost doubled year-over-year but, generally speaking, employment issues – such as workforce readiness, workforce structure, DEI, and employee health and safety – remain lower priority issues, according to the survey.
