Category Archives: Industry Financials

Industry Financials, Market Conditions

Fire and Allied Lines: Recent Success in a Challenging Market

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By William Nibbelin, Head of Industry Data and Actuarial Research, Triple-I

U.S. fire and allied lines have emerged as a standout performer within the property and casualty (P/C) industry, achieving a net combined ratio of 84.8 in 2024. This marks the lines’ best underwriting performance since 2007 and the third consecutive year they have outperformed the broader P/C industry, according to Triple-I’s latest Issues Brief.

This success is particularly notable given the industry’s five-year streak of underwriting losses between 2017 and 2021. Combined ratio is the most common measure of insurer underwriting profitability. It is calculated by dividing the sum of the claim-related losses and expenses by premium. A ratio over 100 indicates the industry is paying out more than it is taking in.

What are Fire and Allied Lines?

Though often grouped together, fire and allied lines serve distinct purposes:

  • Fire Insurance: Covers direct property damage caused by fire.
  • Allied Lines Insurance: Acts as a broader catch-all, covering damage from other perils, such as wind, water, and vandalism.

Together, they provide property protection comparable to that of a standard homeowners’ policy or commercial multi-peril policy, but without liability coverage. The market for these lines is predominantly commercial, protecting larger risks, such as retail shops, office buildings, warehouses, large farms, and schools. Some businesses with significant large-risk exposure may carry more than one fire and allied lines policy from multiple carriers, known as “stacking.”

Shifts in Market Distribution

The way fire and allied lines policies are sold has changed dramatically over the last decade. Standard insurance policies, which once made up two-thirds of the market, dropped to just under 53 percent in 2024.

In their place, two other segments have gained ground:

  • Excess and Surplus Market: This market, which handles higher-risk or non-standard properties, has grown significantly in market share, from 22 percent to over 36 percent
  • Residual Market: After a period of decline, the residual market (also known as the market of last resort) has grown at an annual rate of over 12 percent since 2020.

Severe Weather Amplifies Loss Trends

Weather has increasingly dictated the performance of both lines in recent years. Allied lines insurance, which covers wind and storm damage, has experienced quarterly loss ratios greater than those of fire insurance in 17 of the past 20 quarters due to mounting severe convective storm and hurricane damage.

Though the frequency of fire and wind incidents is similar across personal and commercial lines, the severity of these losses differs. Commercial policies, which cover larger risk properties like industrial facilities and corporate high-rises, tend to have lower frequency rates but much larger severity losses when a disaster strikes. This discrepancy suggests that while fire and wind incident frequency may be predictable, the high value of commercial assets makes every major claim a significant financial event.

Healthy Competition for Consumers

Despite the challenges posed by natural disasters, the fire and allied lines market remains exceptionally competitive. In 2024, the U.S. Department of Justice classified the lines both separately and combined as “unconcentrated,” as measured by the Herfindahl-Hirschman Index (HHI), meaning there is no single dominant player stifling competition.

The number of companies writing these policies has either grown or remained flat in every state with Alabama, California, Delaware, New Jersey, and New York among the most competitive markets. This level of competition is a positive sign for the industry’s long-term stability and for business owners seeking diverse coverage options.

Learn More:

Illinois Storms Highlight Mounting Severe Weather Losses

Convective Storm Losses: Historic 3-Year Streak

Few, High-Powered Storms Defined 2025 Hurricane Season

Wildfire: State of the Risk

Excess and Surplus: State of the Risk

Industry Financials, Market Conditions

Inland Marine Insurance: Competitive, Resilient

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By William Nibbelin, Head of Industry Data and Actuarial Research, Triple-I

The U.S. inland marine insurance industry is celebrating 20 consecutive years of underwriting profitability, with a net combined ratio of 84.2 in 2024. According to Triple-I’s latest Issues Brief, every U.S. state as well as the District of Columbia and Puerto Rico saw profitable results for this line in 2024, with the exception of New Mexico.

Combined ratio is the most common measure of insurer underwriting profitability. It is calculated by dividing the sum of the claim-related losses and expenses by premium. A ratio over 100 indicates the industry is paying out more than it is taking in.

Defining the Inland Marine Policy

Inland marine serves as a “catch-all” for all goods in transit over land. The market is split into two main categories:

  • Commercial (80 percent of the market): Covers “property on the move,” such as construction equipment, transported freight, and infrastructure such as bridges; and
  • Personal (20 percent of the market): Protects high-value niche items, including fine art and jewelry.

Pet insurance, once a subset of inland marine, is reported and tracked as its own entity as of 2024.

Predictors of Premium Changes

Macroeconomic factors – such as the cost of freight transportation, construction, and goods like glass and cattle – are major indicators of premium changes in the inland marine market. Unlike other insurance lines that can be derailed by legal system abuse or complex liability lawsuits, inland marine remains tied to the actual value of physical objects. This means growth occurs whenever the country is building, shipping, and buying durable goods.

During challenging economic cycles, the line has shown remarkable resilience. While the COVID-19 pandemic caused a brief contraction in 2020 due to travel and construction shutdowns, the industry bounced back quickly, with premiums growing by double digits in 2021 and 2022 and again by 6.7 percent in 2023 and 8.4 percent in 2024.

Assessing Frequency and Severity

Analyzing exactly how often claims occur (frequency) and how much they cost (severity) is difficult because inland marine claim count data is not included in public reporting. Additionally, because this line covers a diverse range of risks, gathering clear data can be challenging. However, public data on freight traffic, railroad collisions, equipment investments, and other measurements of goods in transit may serve as proxies to fill in the gaps.

  • Frequency: Changes in nominal GDP highly correlate with exposure. The trend suggests the line is sensitive to actual economic conditions rather than “moral hazard,” or the risk that someone might act dishonestly because they are insured.
  • Severity: Similarly, there is a high correlation of 0.76 with changes in the ratio of actual inland marine incurred losses to GDP. This finding confirms inland marine is a property-damage line rooted in the tangible economy.

A Highly Competitive Marketplace

One way the Department of Justice measures market concentration is through the Herfindahl-Hirschman Index (HHI). Between 2015 and 2024, the HHI for inland marine decreased at a compound annual rate of -4.9 percent, indicating a more open and diverse market. In 2024, every single state, including the District of Columbia and Puerto Rico, remained below the “highly concentrated” threshold.

The recent decision to report pet insurance separately has also clarified the landscape. While pet insurance itself is more concentrated, the broader inland marine market remains a robust field where many carriers compete for business.

Learn More:

Understanding Inland Marine Insurance

Industry Financials, Market Conditions

Farmowners’ Insurance: The Trends Behind a Challenging Market

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By William Nibbelin, Senior Research Actuary, Triple-I

The U.S. farmowners’ insurance industry is navigating a difficult period, recording its third consecutive underwriting loss in 2024, with a net combined ratio of 100.7. According to Triple-I’s latest Issues Brief, this is the line’s tenth underwriting loss in the past two decades and contrasts sharply with the broader property and casualty (P/C) industry.

Combined ratio is the most common measure of insurer underwriting profitability. It is calculated by dividing the sum of the claim-related losses and expenses by premium. A ratio over 100 indicates that the industry is paying out more than it is taking in. While struggling with profitability, the farmowners’ line is seeing significant growth. Premium increases have exceeded the rest of the P/C industry for six of the past ten years.

Defining the Farmowners’ Policy

A farmowners’ policy is a specialized hybrid. Designed primarily for smaller farms, it combines the standard protections of a homeowners’ policy with specific endorsements for agricultural risks like farm structures, heavy equipment, and livestock. Larger industrial agricultural operations use more complex commercial multiline coverage.

Predictors of Premium Hikes

Because farmowners’ insurance is so tied to physical equipment and buildings, certain economic markers serve as leading indicators for where premiums are headed:

  • Machinery Repair Costs: The cost of commercial machinery maintenance has a massive 0.84 correlation with future premium changes.
  • Building Materials: The cost of materials like lumber and steel also shows a near-identical correlation of 0.85, meaning when it gets more expensive to build a barn, insurance costs inevitably follow.

The Gap Between Home and Farm

Historically, farmowners’ and homeowners’ insurance moved in tandem, but that connection is fraying. One reason for this decoupling is that national homeowners’ carriers have become much more aggressive in implementing high deductibles and strict payment schedules for roofs.

Farmowners’ policies, which are often written by smaller, regional mutual companies, have not adopted these trends as quickly. Furthermore, farmers face a unique seasonal risk during the second quarter of the year, the peak for severe convective storms. For at least 20 years, the losses for farmowners during this “storm season” have consistently surpassed those of standard homeowners.

Assessing Frequency and Severity

Analyzing exactly how often claims occur (frequency) and how much they cost (severity) is difficult because farmowners’ data is often lumped in with homeowners’ data in public reporting. However, the financial health of the farm sector may serve as a proxy to fill the gaps.

  • Frequency: A decline in a farm’s “working capital” often correlates with an increase in insurance claims, as a lack of cash can lead to the depreciation of equipment and structures.
  • Severity: The cost of individual claims is heavily influenced by inflation. There is a very high correlation of 0.94 between the cost of manufacturing farm machinery and the rising severity of insurance claims.

A Concentrated Marketplace

The farmowners’ market is considered “highly concentrated” by Department of Justice standards. Nationally, just 25 insurance carriers write 80 percent of all farmowners’ premiums.

This concentration creates “insurance deserts” in some regions. Because standard policies were built for the row crops and houses of the Midwest, they don’t always fit other landscapes. In Hawaii, for example, the reliance on leased land and permanent tree crops means that not a single carrier writes a standard farmowners’ policy. Other areas, like Arkansas and Puerto Rico, have only one insurer currently offering this specific coverage.

As we move through 2026, these trends suggest a market that is highly sensitive to both the financial health of the American farmer and the increasing volatility of spring weather patterns.

Learn More:

How Tariffs Affect P&C Insurance Prospects

Background on: Buying Insurance

Background on: Crop Insurance

Insuring Your Business: Small Business Owners’ Guide to Insurance

Industry Financials, Market Conditions, Workers Compensation

Workers’ Comp:
Quiet Overachiever
in P/C Insurance

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By William Nibbelin, Senior Research Actuary, Triple-I

While personal auto and home insurance tend to be the focus of most insurance-related headlines, workers’ compensation has quietly become a model of stability and profitability. According to Triple-I’s latest Issues Brief, 2024 marked the third-best underwriting performance for the line in two decades, with a net combined ratio of 87.8.

That’s a full decade of underwriting profit for the industry. Since 2015, workers’ comp has consistently outperformed the property and casualty (P/C) insurance market. Combined ratio is the most common measure of insurer underwriting profitability. It is calculated by dividing the sum of the claim-related losses and expenses by premium. In its simplest form, a combined ratio under 100 means the insurer is making an underwriting profit; over 100 means the insurer is paying out more than it’s taking in.

The Jobs Engine and Premium Growth

Workers’ comp premiums are tied directly to the workforce. When more people work and wages rise, premiums generally follow. Only in 2020, because of the COVID-19 pandemic, employment numbers shrank in at least 15 years. Since 2020, the years 2021 through 2024 have seen the highest year-over-year increases in payroll in over two decades. However, premiums aren’t growing as fast as they are for other types of insurance, suggesting that the cost of coverage isn’t increasing though more people are working.

Safer Workplaces

Claims “frequency” — the measure of how often they happen — has been dropping steadily at an annual compound rate of -5.6 percent from 2015 to 2024, indicating work is getting safer. However, the “severity” of claims — the average cost of each claim — has been increasing.

When compared to the overall economy (GDP), however, the average cost of claims is decreasing. Therefore, the rising costs of individual claims are being driven more by general inflation in the economy than by workplace safety getting worse.

A More Competitive Market

One measure of industry competition is market concentration, which can be determined by the Herfindahl-Hirschman Index (HHI). The higher the index, the more market share is concentrated in fewer companies, implying less competition. The workers’ comp market has become much more competitive over the last 10 years. This is partly because states are moving away from government-run systems. For example, Missouri recently privatized its state fund in early 2025. Today, only 18 states have a competitive state fund. The direct combined ratio for fully privatized states has outperformed these states eight of the last 10 years. Fortunately, the direct written premium for these competitive funds as a percentage of total workers’ comp premium has dropped from 14.9 percent in 2015 to 12.9 percent in 2024.

Learn More:

NCCI Sees Underwriting Profitability Continuing for Workers Comp Line

NCCI AIS 2025: Key Insights on Workers Comp

Workers Comp Premium, Loss, Market Trends Support Its Ongoing Success

Industry Financials, Insurers and the Economy, Market Conditions, Technology

PWC: A.I. Megadeals Spur Insurance M&A Growth

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By Lewis Nibbelin, Research Writer, Triple-I

Deals exceeding $1 billion drove insurance industry mergers and acquisitions (M&A) in 2025, aligning with a surge of artificial intelligence-based megadeals in the broader M&A market, according to PwC’s U.S. Deals 2026 Outlook. While total M&A deal value rose to $1.6 trillion through November 30 – the second-highest value ever recorded – the insurance sector remained consistent, though ongoing economic uncertainty could challenge this stability.

Upward trends emerge

Owing 93 percent of its value to megadeals, the insurance industry’s deal volume totaled $31.8 billion during the second half of 2025, compared to $30 billion during the previous six months. Heading into 2026, PwC projects that both improved loss ratios and rising pressure on property and casualty rates will facilitate further deals, as the industry’s performance can attract investors while also leading carriers to seek growth through more acquisitions.

“In coming months, expect interest rate developments and an industry-wide search for growth to strongly influence insurance deals activity,” said Mark Friedman, PwC U.S. insurance deals leader.

Conversely, total M&A market value increased by 45 percent from 2024, with more than 20 percent of its 74 deals valued at $5 billion or more relating to A.I. Such market activity suggests “A.I. is significantly accelerating software and consumer goods development” by boosting portfolio strategies, operational efficiencies, and other gains across various industries, the report notes.

Ramzi Ramsey, a senior managing director at Blackstone Growth, emphasized the increasing role of A.I. as a core driver of M&A growth, arguing that “companies who are viewed to benefit from AI tailwinds are seeing outsized multiples and deal activities,” whereas “companies where AI is viewed to be a detractor, or if the AI impact is cloudy, may have no bid.”

Middle-market lags

Though still the third-largest in the past decade, overall M&A market volume rose by only 2 percent from 2024, with middle-market deals between $100 million to $1 billion slumping to their lowest volume since at least 2013. Tariff policy shifts largely fueled these figures, reflecting greater caution among dealmakers – particularly smaller businesses – as supply-chain risks became more unpredictable.

While sudden policy changes and recent trade disputes could persist into the new year, PwC’s report found that “interest rate cuts this year have already helped mid-tier corporates, and further Federal Reserve Board action in 2026 could go a long way in relieving pressure on them,” especially as current tariff policies continue to stabilize.

In combination with declining interest rates, “products that can withstand declining consumer performance and confidence” should help the insurance sector remain active in 2026, the report adds, pointing to A.I. investments as essential to maintaining “solid ground” in the M&A market.

Learn More:

Inflation, replacement costs, climate losses shape homeowners’ insurance options

Despite Headwinds, P/C Insurance Industry Maintains Course in 2025

JIF 2025: U.S. Policy Changes and Uncertainty Imperil Insurance Affordability

Affordability, Homeowners Insurance, Industry Financials, Insurance Industry, Severe Convective Storm, Technology

Inflation, replacement costs, climate losses shape homeowners’ insurance options

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A person's hands are arched over a small model of a home that is placed on top of an insurance contract.

The homeowners insurance market is catching up to its cost drivers while still facing challenges to affordability and availability. Rates continue to climb as natural disasters intensify and replacement costs rise, but industry analysts expect meaningful improvement over the next two years. A new Triple-I Issues Brief provides a snapshot of the market’s performance and outlook, and discusses how some trends are shaping its future.

The latest results for the product line have helped narrow the anticipated 2025 gap between the performance of the personal and commercial lines. Despite a volatile start to 2025 driven largely by January’s destructive Los Angeles wildfires, homeowners insurance is still headed for double-digit net written premium growth this year.

With ​​nearly half of all homes in the United States at risk of “severe or extreme” damage from weather related events, climate risk looms large. In January 2025, the U.S. Department of the Treasury released “Analyses of U.S. Homeowners Insurance Markets, 2018-2022: Climate-Related Risks and Other Factors.“ a report based on the most comprehensive and granular snapshot of the homeowners insurance market to date. The agency found that climate risk is making it more costly for insurers to operate, as insurers’ costs in 2018-2022 were higher in areas with the highest expected losses from climate-related perils. The paid loss ratio, which reflects how much insurers paid for claims relative to the premiums they collected, was highest in the highest-risk ZIP Codes.

In 2025, the U.S. experienced its first hurricane season without a single landfall in a decade. However, the Triple-I issue brief explains, while 2025 economic losses from natural catastrophes are running below recent averages, other perils — such as severe convective storms, wildfires, and flash flooding — are becoming formidable sources of insurer loss. These increasingly frequent moderate disasters are challenging traditional catastrophe models built around infrequent peak perils, such as major hurricanes.

At the same time, soaring replacement costs have become the new normal for the homeowners market. Repair and rebuilding expenses have jumped nearly 30 percent over the past five years, fueled by inflation, supply-chain disruptions, rising construction material prices, labor shortages, and, more recently, new federal tariffs. Although the full impact of these tariffs has been milder than expected so far, the worst effects may simply be deferred until 2026 as inventories decline. Rising replacement costs translate directly into higher claim payouts, placing additional pressure on insurers and, ultimately, policyholders.

Beyond tariffs, other political and regulatory shifts are adding a new uncertainty as federal disinvestment in climate monitoring and mitigation may impede the insurance industry’s ability to accurately price risk, predict future losses, and, ultimately, provide affordable coverage. Meanwhile, several states grapple with balancing affordability with the stability and solvency of their insurance markets.

Insurance pricing must reflect these increased risks to maintain policyholder surplus, the funds regulators require insurers to keep on hand to pay claims. If premium rates fail to reflect increased costs, insurers may rapidly drain their policyholder surplus. This issue brief discusses how emerging technologies, such as advanced predictive analytics, aerial imagery, and smart-home sensors, could pave the way for more accurate pricing, faster claims processing, and improved risk prevention.

An Insurance Research Council (IRC) study indicates that homeowners familiar with some AI-driven insurance solutions view pricing using those technologies as fairer and express fewer concerns overall. These tools may play a critical role in bolstering affordability, rebuilding trust, and strengthening the resilience of the homeowners’ insurance sector amid escalating climate and economic pressures.

The issue brief’s list of factors and trends impacting the homeowners’ market isn’t intended to be exhaustive. Accordingly, future briefs on homeowners (or property lines in general) may highlight other pertinent topics, such as the link between insurance premiums and property prices. While home values in high-risk areas can often be diminished by rising premiums, higher home values can generally mean higher replacement costs, and consequently, lead to higher premiums. As of early 2025, home prices are up 60 percent nationwide since 2019 and still rising by 3.9 percent YoY, according to the Joint Center for Housing Studies at Harvard University. The Harvard report cites Freddie Mac data indicating home insurance premiums jumped 57 percent from 2019 to 2024.

We invite you to read our take on the homeowners’ market and follow our blog to keep abreast of key issues impacting the industry.

Homeowners Insurance, Industry Financials, Insurers and the Economy, Market Conditions

IRC: Homeowners’ Insurance Rate Filing Growing Less Efficient

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By William Nibbelin, Senior Research Actuary, Triple-I

The rate-filing process for homeowners’ insurance has become less efficient and effective, a new study by the Insurance Research Council (IRC) shows.

The report – Rate Regulation in Homeowners Insurance: A Comparison of State Systems – analyzed industry data from 2010 through 2024 across all states, including the District of Columbia. The study found that, not only is it taking longer for insurers to get rate increases approved, but the increases are lower than requested, with bigger gaps between the request and the granted amount than had previously been the case.

Key findings:

  • The number of rate filings is growing at a compound annual growth rate of 3.3 percent from 2018 to 2024 nationwide.
  • The average number of days to approval grew from 44 to 63 days.
  • The number of filings withdrawn increased from 2.9 percent of filings to 3.9 percent of filings.
  • The percentage of filings receiving less rate impact than requested grew by more than 10 points.
  • The disparity in approved rate impact grew by nearly 1 point.
  • Market concentration (as measured by the Herfindahl-Hirschman Index, or HHI) decreased by 14.6 percent.
  • The residual share of direct written premium has grown at a compound annual growth rate of 10.5 percent from 2020 to 2024
  • A strong-to-moderate correlation exists between net underwriting losses and premium shortfalls within states and across time.
  • Filing process measures and market outcomes vary by regulatory systems.

During this same period from 2010 through 2024, the homeowners’ insurance industry experienced a net combined ratio over 100 in 10 of the 15 years. Combined ratio – calculated as losses and expenses divided by earned premium plus operating expenses divided by written premium – is a key measure of underwriting profitability. A combined ratio over 100 represents an underwriting loss.

The IRC report includes the determination of a strong correlation between underwriting loss and premium shortfalls, defined as the potential dollar difference between the effective filed rate impact and approved rate impact.

In California, for example, the time to approval exceeds that of the next highest state – New York – by more than four months. California also has the second-fastest-growing residual market share from 2.1 percent in 2019 to 8.2 percent in 2024 and the second-fastest-growing excess and surplus homeowners market share from 0.3 percent in 2010 to 6.3 percent in 2024. This means that, at most, only 85 percent of California homeowners’ insurance is covered by a standard policy.

IRC, like Triple-I, is an affiliate of The Institutes.

Auto Insurance, Business Insurance, Homeowners Insurance, Industry Financials, Market Conditions, Workers Compensation

Despite Headwinds,
P/C Insurance Industry Maintains Course in 2025

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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.

Auto Insurance, Industry Financials, Market Conditions

Personal Auto Shines, General Liability Faces Headwinds in Q3 2025

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By William Nibbelin, Senior Research Actuary, Triple-I

The U.S. property/casualty (P/C) insurance industry is entering the latter half of 2025 with a nuanced underwriting landscape, as revealed in the latest “Insurance Economics and Underwriting Projections: A Forward View” report from Triple-I and Milliman. While personal auto continues to be a strong performer, the general liability sector is grappling with persistent profitability concerns.

Industrywide Trends

The overall industrywide net combined ratio (NCR) for 2025 is forecast at 99.3, a 2.7-point increase from 2024. Despite some line-specific challenges, a broader return to profitability is anticipated in 2026. The overall Net Written Premium (NWP) growth rate for 2025 is projected to be 6.8 percent, a decrease of 2.0 points from 2024, marking the lowest growth since 2020. Personal lines growth is expected to outpace commercial lines by 1.5 percentage points in 2025, though this gap is predicted to narrow by 2027.

Economic Influences

Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I, highlighted the resilience of the U.S. economy and the P&C industry amidst tariffs and trade uncertainty.

“The insurance industry’s economic growth drivers continue to outperform overall U.S. GDP growth,” he stated. However, Léonard cautioned that revised economic data for the first half of the year might paint a weaker picture of the U.S. economy, potentially leading to more widespread concerns of contraction or even recession heading into the fall.

He also noted, “With inventories running low, their depletion will now accelerate inflation and slow growth for the rest of the year.”

Léonard pointed out that price increases due to tariffs and other economic factors have been most severe for personal auto, with used car and truck prices increasing by 7.7 percent in the first half of this year. The P&C industry typically lags the broader economy by one to two quarters, suggesting that a potential broader economic contraction could impact the industry starting in Q1 or Q2 of 2026.

Personal Lines Underwriting Performance

Personal auto continues to be a robust area, with a forecast 2025 NCR of 96.0. This is approximately 1 point higher than 2024, but the line remains on track for continued profitability.

Homeowners insurance, however, faced significant challenges in Q1 2025 due to the Los Angeles wildfires earlier this year. The Q1 2025 Loss Ratio for homeowners was the worst first-quarter experienced in over 15 years and the worst of any quarter since Q2 2011.

Commercial Lines Underwriting Performance

Jason B. Kurtz, FCAS, MAAA, a principal and consulting actuary at Milliman, noted that commercial auto is forecast to remain unprofitable from 2025 to 2027, despite an estimated double-digit NWP growth in 2025.

Commercial Property with a forecast 2025 NCR of 88.3 remains profitable while 5.5 points over 2024. Strong premium growth from 2021 through 2023 contributed to profitability in the two most recent years, but there’s been a significant slowdown with premiums growing just 4.2 percent for Q1 2025. Commercial Multi-Peril swung to profitability in 2024 after combined ratios above 100 dating back to 2016. However, poor Q1 2025 results are driving a forecast 2025 Net Combined Ratio of 101.0.

The general liability line continues to be a source of profitability concern. The Q1 2025 General Liability Loss Ratio was the second worst first quarter in more than 15 years, showing less than a 1-point improvement from Q1 2024. For general liability, he stated, “the NCR is expected to improve in 2026-2027 but remain unprofitable. It is worrisome that the 1st quarter 2025 direct incurred loss ratio was only marginally improved relative to the 1st quarter of 2024, and that these two results are the highest first quarter loss ratios in more than 15 years. On a positive note, premium growth does appear to be picking up.”

In contrast, workers compensation continues its strong performance. Kurtz highlighted that the forecasted 2025 NCR of 90.6 represents a 1.0-point improvement from prior estimates, as the Q1 2025 Loss Ratio was the lowest in over 15 years. Stephen Cooper, Executive Director and Senior Economist at the National Council on Compensation Insurance (NCCI), commented on the labor market’s impact, stating, “While employment has been concentrated amongst fewer industries, the labor market has shown resilience and continued strong payroll growth for workers compensation.”

He also added, “With economic uncertainty elevated and recession concerns resurfacing, consumer behavior will be important to watch.”

*Note: Insurance Economics and Underwriting Projections: A Forward View is a quarterly report available exclusively to Triple-I members and Milliman customers.

Disaster Preparedness, Disaster Resilience, Industry Financials, Insurers and the Economy, Legal Environment, Market Conditions

JIF 2025: Federal Cuts Imperil Resilience Efforts

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By Lewis Nibbelin, Contributing Writer, Triple-I

Recent efforts to curb federal spending – particularly massive proposed cuts to several major federal science agencies and numerous FEMA grant programs – drew concern from panelists at Triple-I’s Joint Industry Forum in Chicago.

Slated to lose around half of their original budgets, organizations like the National Oceanic and Atmospheric Administration (NOAA) and the National Science Foundation (NSF) provide insurers with much of the research data needed to model climate risks, at no cost to insurers nor the broader public. Abolishing this research, which also enables daily weather and natural disaster forecasting, will increase underwriting costs and those associated with various other industries, including transportation, agriculture, and energy.

“Federal science agencies probably facilitate more economic activity in the country than any other federal agency,” said Frank Nutter, president of the Reinsurance Association of America (RAA). “Fully funding and restaffing those agencies is pretty critical.”

A host of cancelled FEMA mitigation programs have left dozens of catastrophe-prone communities without aid – including projects that were approved before the cuts. Ending the Building Resilient Infrastructure and Communities (BRIC) program, for instance, rescinded approximately $882 million in climate resilience funding  —  “money  we could have spent on mitigation, so we don’t have to spend so much after a disaster,” said Neil Alldredge, president and CEO of the National Association of Mutual Insurance Companies (NAMIC).

Nutter added that “weighing against safety, teacher salaries – all the kinds of things that communities grapple with,” most former grantees lack the resources for “risk reduction or municipal projects and infrastructure” without federal investment.

Population growth in high-risk areas exacerbates the issue, Alldredge said.

“If you look at a map of this country and the population changes from 1980 to today, we have moved the entire population to all the wrong places,” he explained. Building properties capable of withstanding these weather patterns – let alone insuring them – has launched the industry into “a new era of risk.”

While the panelists agreed that opportunities to improve FEMA operations exist, they questioned President Trump’s consideration to disband it entirely by shifting to a state-based relief system.

David Sampson, president and CEO of the American Property Casualty Insurance Association (APCIA), noted that “the very nature of a natural disaster means that it overwhelms the local entity’s ability to respond,” rendering any state-based solution “unworkable.”

“I think we as an industry know where the low-hanging fruit for reforms are,” Sampson continued, because “we interact with FEMA on the ground after disasters.”

State-level legislative momentum

Though the Trump administration’s current plans do not bode well for the future of disaster resilience, insurers celebrated many state legislative wins this year regarding tort reform, notably in Georgia and Louisiana.

“Even at the federal level, there is a growing sense of awareness of the negative impact that an out-of-control tort system is taking on the economy and the American consumer,” Sampson said, highlighting a new bill that would impose taxes on third-party litigation funding.

Florida also successfully resisted challenges to its 2023 and 2024 reforms, which have already helped stabilize the state’s insurance rates and attracted new insurers after a multi-year exodus. Charles Symington, president and CEO of the Independent Insurance Agents & Brokers of America, pointed out that industry advocacy is crucial to tort reform survival.

“Once you get these beneficial pieces of legislation passed,” he said, “we have to fight the fight in every legislative session.”

Symington then contrasted Florida’s recovering market with California’s enduringly hostile regulatory environment, propelled by the 1988 measure Proposition 103.

Insurance Commissioner Ricardo Lara has implemented a Sustainable Insurance Strategy to mitigate the effects of Prop 103 – such as by authorizing insurers to use catastrophe modeling if they agree to offer coverage in wildfire-prone areas – but the strategy has garnered criticism from legislators and consumer groups.

“California doesn’t have the assessment ability like Florida does,” agreed moderator Fred Karlinsky, shareholder and global chair of Greenberg Traurig, LLP. “California is three decades behind.”

As insurers adjust their risk appetite to reflect these constraints, more property owners have been pushed into California’s FAIR Plan – the state’s property insurer of last resort.

“Our members are having to cobble together coverage,” said Joel Wood, president and CEO of the Council of Insurance Agents & Brokers (CIAB), who noted that the FAIR plan’s policyholder count has more than doubled since 2020.

Natural disasters like January’s devastating wildfires underscore California’s need for premium rates that adequately reflect the full impact of these risks, which is essential to the continued availability of private insurance in the state.

“When you have the right leadership in place – the governor, the state legislature – and you have the industry being effective in our advocacy, then we can improve these difficult marketplaces,” Symington concluded.

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