Category Archives: Insurers and the Economy

Auto Insurance, Insurers and the Economy, Market Conditions

Oil Prices Might Reduce
Accidents, But Severity Would Offset Impact

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By Jeff Dunsavage, Head of Research Publications and Insights, Triple-I

If oil prices continue to rise due to hostilities in the Middle East, fewer drivers on the road could lead to fewer accidents and insurance claims. However, increased severity – driven by rising replacement costs – would likely overwhelm any decrease in frequency over time, according to Patrick Schmid, Triple-I’s chief insurance officer.

“Even before the war, repair costs were rising more than twice as fast as general inflation,” Schmid said.  “From the supply-chain disruptions of COVID through the past year’s economic policy uncertainty with tariffs, as well as legal system abuse, upward pressure on claim costs has been unrelenting.”

Indeed, more costly gas might not affect driving as much as one might expect. According to the American Public Transportation Association, a 10 percent rise only reduces driving by 0.2 to 0.3 percent. Even if high prices continue, the average drop is just 1.1 to 1.5 percent.

“People still need to get to work and run their lives,” Schmid said. “Gas price alone isn’t enough to dramatically change that.”

Research shows wealthier drivers cut back on driving more than lower-income drivers – who tend to have fewer choices as to how they get to and from work – when gas gets expensive. Policyholders who can’t easily reduce their driving are often the ones with tighter budgets and older, less safe vehicles.

Oil prices don’t just affect how much people drive — they also flow through the entire repair supply chain. The cost of auto maintenance and repair climbed roughly 10 percent from 2023 to 2024 alone, a trend pushed higher by inflation and a shortage of skilled technicians.

What does this mean for policyholders?

The factors that influence premiums vary widely by state, and accident frequency is just one of them.  Louisiana – one of the least-affordable states – has recently seen declines in premiums as a result of both reduced frequency and severity.  

A major contributor to high premiums is the prevalence of fraud and legal system abuse in those states. States like Florida that have proactively sought to address these factors through legal system reforms, have begun to see rate declines. Since Florida’s reforms, nearly 20 new property insurers have entered the state and existing carriers have expanded their market share, driving renewed competition in the private market. This facilitated the lowest number of policies administered by Citizens Property Insurance Corp. – the state-run insurer of last resort – in over a decade.

“It’s encouraging to see other states beginning to follow Florida’s lead,” Schmid said. “It’s important for policymakers to follow successful examples.”

Learn More:

Lessons for Texas from Florida’s Legal System Reforms

Florida Premiums Drop Amid Post-Reform Stability

Uber Joins Effort to Drive Legal System Reform

Auto Premium Growth Slows as Policyholders Shop Around, Study Says

Even With Recent Rises, Auto Insurance Is More Affordable Than During Most of Century to Date

New York Among Least Affordable States for Auto Insurance

Louisiana Auto Insurance Rates Benefit from Declines in Frequency, Severity

Revealing Hidden Cost to Consumers of Auto Litigation Inflation

Uber Joins Effort to Drive Legal System Reform

Legal System Abuse, Artificial Intelligence Cloud 2026 Outlook

Triple-I Legal System Abuse Awareness Campaign Enters California, Illinois

Georgia Targets Legal System Abuse

Homeowners Insurance, Insurers and the Economy, Legal Environment

Lessons for Texas in Florida Legal Reforms

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By Lewis Nibbelin, Research Writer, Triple-I

Texas lawmakers struggling to ease the state’s rising insurance costs might find useful insights from Florida’s sustained commitment to legal system abuse reform.

In recent years, Florida led the nation in claim-related litigation, accounting for 72 percent of homeowners’ insurance lawsuits despite representing only 10 percent of homeowners’ claims. This disparity fueled escalating premium rates and a multi-year insurer exodus, steering state lawmakers toward litigation reforms in 2022 and 2023. These reforms, among other things, curtailed one-way attorney fees and assignment of benefits (AOB) for property insurance claims.

Post-reform, dozens of homeowners’ and auto insurers have filed for premium reductions in the state, with some carriers filing cumulative reductions of more than 20 percent. Renewed market competition from the 18 new property insurers in the Sunshine State also facilitated the lowest number of policies administered by Citizens Property Insurance Corp. – the state-run insurer of last resort – in over a decade, at a 50 percent drop last year from 2024 due to successful depopulation to the private market.

Florida’s growing stability reflects a steady decrease in nuclear verdicts (awards of $10 million or more) and claims-related lawsuits, with every month of 2025 reporting a continued decline in newly filed litigation compared to the same month the previous year, the state governor’s office said in a statement.

Texas insurance premiums spiral

Unlike Florida’s trajectory, Texas once set the gold standard for a fair and balanced court system, leading with a series of 1990s and early 2000s reforms that included a $250,000 cap on noneconomic damages in medical malpractice cases. While this legislation remains intact, continued efforts have stalled under repeated legislative challenges to preexisting and proposed reforms.

Last year’s failed state Senate Bill 30, for instance – based on a similar Florida measure – aimed to restrict “phantom damages” by showing juries the actual amount paid for medical bills, rather than an inflated amount determined by a healthcare provider’s list prices. Such amounts contribute to outsized damage awards in the state, which hosted the highest volume of U.S. nuclear verdicts in 2024.

Insurers must account for these added costs when setting rates, leading to a 19 percent increase in average Texas homeowners’ insurance rates in 2024 after a 21 percent spike in 2023, according to Texas Department of Insurance data. Research from the Insurance Research Council – an affiliate of The Institutes, like Triple-I – ranked Texas as the sixth least affordable state for homeowners’ insurance in 2022, with homeowners on average paying 3.13 percent of median household income for coverage.

These trends earned Texas a spot on the American Tort Reform Foundation’s (ATRF) annual “Judicial Hellhole” watch list last year, which highlighted “a wave of industry-targeted lawsuits” within the state. Noting that excess litigation also costs Texans an average of $1,724 each year, ATRF president Tiger Joyce argued “Texas courts are in jeopardy — and it’s hardworking families who pay the price for lawsuit abuse.”

Texas policymakers would do well to build on the state’s track record of meaningful reform and continue pushing for legislation modeled on Florida’s success. Because the Texas Legislature will not meet again until January 2027, the Lone Star State will remain a difficult litigious environment for defendants and insurers alike for some time.

Learn More:

Florida Premiums Drop Amid Post-Reform Stability

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Take Care in Addressing Homeowners’ Premiums, Bloomberg Cautions Policymakers

Litigation Reform Works: Florida Auto Insurance Premium Rates Declining

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Triple-I Brief Highlights Legal System Abuse and Attorney Advertising

Auto Insurance, Coastal Property, Homeowners Insurance, Insurers and the Economy, Legal Environment

Florida Premiums Drop Amid Post-Reform Stability

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By Lewis Nibbelin, Research Writer, Triple-I

Legislative reforms to address claim fraud and legal system abuse in Florida have continued to help stabilize the state’s property/casualty insurance market, contributing to premium reductions for thousands of homeowners and drivers, according to the latest Triple-I Issues Brief.

Since the reforms, nearly 20 new property insurers have entered the state and existing carriers have expanded their market share, driving renewed competition in the private market. This shift facilitated the lowest number of policies administered by Citizens Property Insurance Corp. – the state-run insurer of last resort – in over a decade, after a 50 percent drop in policies in force from 2024.

Claims-related litigation has also plummeted, with insurance litigation filings down 23 percent year-over-year from 2023 to 2024. Filings then fell 25 percent during the first half of 2025, compared to the same period in 2024, and remain below pre-2018 levels, as reported by the state governor’s office.

Florida’s reforms were enacted in 2022 and 2023, at a time when the state accounted for 72 percent of the nation’s homeowners claim-related litigation but only 10 percent of homeowners claims. The disparity reflected escalating premium rates and a multi-year insurer exodus, steering state lawmakers toward litigation reforms that, among other things, curtailed one-way attorney fees and assignment of benefits (AOB) for property insurance claims.

Ongoing market momentum

The impact of the reforms is particularly evident in Florida’s auto insurance market, which recorded the lowest personal auto liability loss ratio in the nation – and the state’s lowest in 15 years – in 2025, at 52.5 percent, according to the OIR. The market’s physical damage loss ratio also fell to 49.5 percent, reflecting a steady decline from 112.0 percent in 2022.

Such stability produced extensive savings for Florida drivers in 2025, with the state’s top five auto insurance groups averaging a more than 6 percent rate reduction through mid-year, accounting for 78 percent of the state’s auto market. These reductions have increased to an average of 8 percent based on the most recent 2026 regulatory filings.

Homeowners are also experiencing relief after more than 185 residential filings for flat or decreased rates over the past two years, the OIR reported. Rate changes have continued to flatten in the state after years of tracking the upward trend of rates nationally.

Lower reinsurance costs factor into this finding, translating to a 10.7 percent price decrease overall on reinsurance in 2025, according to a Gallagher Re report on the sustained success of Florida’s reforms.

“Hurricanes Helene and Milton, two powerful and destructive storms that hit Florida in September-October 2024, also provided a useful – if unwanted – test case for the reforms’ efficacy,” the report added. “Many insurers ceded losses on layers below the state’s catastrophe fund, but despite this, there was more reinsurance capacity than expected available for these layers.”

Learn More:

Litigation Reform Works: Florida Auto Insurance Premium Rates Declining

Revealing Hidden Cost to Consumers of Auto Litigation Inflation

New Consumer Guide Highlights Economic Impact of Legal System Abuse and the Need for Reform

Disasters, Litigation Reshape Homeowners’ Insurance Affordability

Florida Senate Rejects Legal-Reform Challenge

Affordability, Auto Insurance, Insurers and the Economy, Legal Environment

Uber Joins Effort to Drive Legal System Reform

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By Lewis Nibbelin, Research Writer, Triple-I

Ridesharing platforms like Uber are as vulnerable as other businesses to the cost impacts of legal system abuse – costs that inevitably are passed along to their customers. The company reported a more than 50 percent increase in its ride insurance costs per trip in recent years, despite also recording a lower rate of overall crashes from 2017 to 2022.

Passengers see these costs reflected in trip prices, with insurance accounting for roughly 10 percent of the average rider fare nationwide, or as high as 47 percent in costlier areas like Los Angeles County.

“Insurance for us is the second-highest operating cost after payment to drivers,” said Adam Blinick, Uber’s senior director of public policy and communications, in a recent Executive Exchange interview with Triple-I CEO Sean Kevelighan. “It’s been a bit of a calling card to get more aggressive on litigation and being public about where we see the abuse.”

Coordinated attorney outreach helps fuel the trend. Among motor accident victims surveyed by Protecting American Consumers Together, attorneys contacted 92 percent after their accident, including 57 percent who reported they were contacted by more than one. Solicitation typically occurred within a week of the incident, or “before insurance can play a part in addressing someone’s concerns,” Blinick noted.

“This creates more avenues to push people into these mills and artificially inflate the value of claims,” he said.

Third-party litigation funders play a major role in recruiting claimants. Though lack of transparency surrounding the market conceals its true size, a recent report from the National Insurance Crime Bureau and 4WARN estimates third-party funders spent more than $380 million on online search ads alone between June 2024 and June 2025, with some engaging in brand impersonation and search engine manipulation to mislead consumers and extend litigation.

Research from Triple-I and the Casualty Actuarial Society (CAS) estimates excessive litigation added $231.6 billion to $281.2 billion in liability insurance losses from 2015 to 2024, a finding that economic inflation alone cannot explain. A separate Triple-I report on civil case filings reinforces the finding, revealing approximately $42.8 billion in excess litigation value from motor vehicle tort cases filed between 2014 and 2023 in the federal and state civil courts.

“That’s a drop in the bucket to the reality of the problem,” Kevelighan said, “because less than 10 percent of cases had judgments. Others were settled and we can’t necessarily track the settlement data.”

Blinick discussed how uninsured and underinsured motorist (UM/UIM) insurance limits can also attract high claim volumes and disputes, particularly for the rideshare industry. Multiple states require ridesharing businesses to pay $1 million or more for such coverage, with limits in New York set at $1.25 million. Though intended to provide relief for policyholders hit by UM or UIM, these requirements mean bad actors stand to win more from claims, incentivizing excessive lawsuits and fraud.

Staged crashes generate many such claims, with some schemes involving a network of rideshare passengers who are “tied to the law firm, the medical providers, the body shops, the lenders themselves… all across the board,” Blinick said.

He added that many offenders “are the same ones who are doing slip and fall claims and mass tort suits against cities and counties. They’re not picky in terms of who they’re going after. They’re going wherever the opportunity presents itself.”

A 2025 California law that went into effect this year aims to help mitigate fraud by reducing the rideshare industry’s UM/UIM coverage limits from $1 million to $300,000 per accident. Uber has also submitted a November 2026 ballot measure that would cap contingency fees and limit medical damages in vehicle accident cases within the state, as well as shown support for New York’s 2027 budget proposals to combat fraud and unnecessary litigation.

Learn More:

Triple-I Legal System Abuse Awareness Campaign Enters California, Illinois

New York Among Least Affordable States for Auto Insurance

Claims Severity Drives Liability Insurance Losses

Revealing Hidden Cost to Consumers of Auto Litigation Inflation

Litigation Reform Works: Florida Auto Insurance Premium Rates Declining

New Consumer Guide Highlights Economic Impact of Legal System Abuse and Need for Reform

IRC Report Reveals One in Three Drivers Were Either Uninsured or Underinsured in 2023

Affordability, Artificial Intelligence, Insurers and the Economy, Legal Environment

Legal System Abuse, Artificial Intelligence Cloud 2026 Outlook

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By Lewis Nibbelin, Research Writer, Triple-I

Though U.S. economic growth in the coming year remains strong, an ongoing rise in legal system abuse and emerging AI trends may challenge that outlook, according to Chubb chairman and CEO Evan Greenberg in a recent letter to shareholders.

Describing the 2026 market outlook as a “mixed picture,” Greenberg explained that, despite growth drivers like innovation investments and federal deregulation efforts, these gains face challenges from the “cancer” of excessive litigation, which raises costs on “just about everything – transportation, food, construction, insurance and more.” Such expenses amount to an average “tort tax” of $4,000 annually per household, Greenberg argued, and inflate liability insurance costs up 7 percent to 9 percent a year.

“The trial bar is a money-making growth industry, and it continues to expand as lawyers search for new theories of liability to bring more lawsuits,” Greenberg said, adding that third-party litigation funders (TPLF) help turn “courtroom payouts into a speculative asset class.”

Florida has made substantial progress in mitigating these costs through its 2022 and 2023 reforms, contributing to a $4.2 billion increase in business activity and the creation of more than 29,000 jobs, the Perryman Group estimates. Several states, including Georgia, Louisiana, and New York, have also enacted legislation establishing greater oversight of TPLF, spurring similar legislative momentum on a federal level.

Greenberg emphasized the need for continued reforms as courtroom imbalances persist nationwide, noting “it will be a long fight” before policyholders begin to see their impact on insurance premiums and other costs.

Accommodating a digital age

Rapid advancements in AI have bolstered productivity “in all aspects of the underwriting and claims processes,” Greenberg said, facilitating deeper insights, improved customer experiences, and new product innovations. Integrating AI into the insurance industry, however, poses unique hurdles, particularly as companies grapple with an expanding talent gap.

AI adoption can help attract professionals who may otherwise overlook the industry, but upskilling and reskilling current employees is essential to push adoption forward. By investing in AI skill development, such expertise can be paired with “business professionals and managers who know intimately how the business works and what’s required for change,” Greenberg explained.

While any major tech transformation demands “iterative, gritty work,” Greenberg reiterated “the stronger our competitive profile, the more we will grow, which means more employment over time with higher productivity. And remember, when it comes to most insurance, people still want to deal with people. It’s a trust business.”

Learn More:

Triple-I Legal System Abuse Awareness Campaign Enters California, Illinois

Resilient U.S. P/C Market Performance Sets Stage for a Complex 2026

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

Allstate, Aspen Initiative Seeks to Ease Trust Gap

Tech — Especially A.I. — Is Top of Mind for Global Insurance Executives

Affordability, Homeowners Insurance, Insurers and the Economy, Market Conditions

Bridging the Short-Term Rental Coverage Gap

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By Lewis Nibbelin, Research Writer, Triple-I

As short-term rentals grow increasingly popular, many hosts remain unaware of the added complexity and often higher costs of properly insuring them, according to Triple-I’s latest Outlook.

Though coverage needs will vary, standard homeowners’ insurance policies typically exclude losses from commercial activity, which encompasses a broader range of risks with higher corresponding premiums, the report explains. Because short-term rentals fall under commercial use, rental owners who fail to update their existing policies may face denied claims, reduced liability coverage, higher deductibles, and other serious consequences.

Operating short-term rentals in two-unit or multi-unit dwellings compounds these concerns, as uncovered incidents affect the master insurance policy shared by both the rental unit owner(s) and their neighbors. In such instances, losses can impact the policy terms, conditions, exclusions, and premiums for all residents.

Across single and multi-unit dwellings, commercial activity may violate the permit requirements and operational restrictions set by state and local laws, leading to further policy limitations and potentially cancellation or nonrenewal, the report notes. While short-term rentals most directly increase liability exposure, such policy changes may also impact coverage for physical loss or damage, content loss or damage, and loss of use.

For homeowners planning to rent out their residences, the report outlines the following steps to maintain coverage and remain adequately protected:

  • Notify their insurer: Before operating the rental, owners must contact their insurance carrier, broker, or agent, including the master policy insurance carrier if the dwelling is multi-unit.
  • Comply with policy terms: Rental owners must adhere to their existing homeowners’ policy terms, conditions, and exclusions for short-term rentals, including any restrictions on number of guests and days or nights for rental use.
  • Obtain appropriate coverage: Depending on individual circumstances, rental owners may purchase commercial property insurance, small business insurance, or short-term rental-specific coverages to protect against the commercial risks of short-term rental use. In multi-unit dwellings, all unit owners must collectively purchase new coverage.

Many insurance carriers offer short-term rental endorsements or allow rental periods on standard homeowners’ policies, though restrictions still apply. Consulting with an insurance professional to understand available coverage options is crucial to meeting the specific needs of a given rental unit.

Triple-I’s new Outlook builds on testimony from Triple-I Chief Economist and Data Scientist Dr. Michel Léonard to New York City committee members last year as they considered legislation to expand homeowners’ ability to earn income through short-term rentals. Léonard discussed the potential insurance challenges of the expansion, focusing on the pervasive protection gap among residents using their homes for commercial purposes. Neither bill successfully made it past the city council.

Learn More:

Triple-I Chief Economist Testifies on NYC Measure on Short-Term Rentals

Triple-I Testifies on New York Insurance Affordability

Take Care in Addressing Homeowners’ Premiums, Bloomberg Cautions Policymakers

Insurance Affordability, Availability Demand Collaboration, Innovation

Triple-I Issues Brief: Homeowners Insurance (Members-Only)

Insurance Industry, Insurers and the Economy, Reinsurance and E&S

Triple-I Features Lloyd’s in Latest Issue Brief

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A diagram of Lloyd's, depicting the integration of the 3 core groups in the marketplace: Members, Syndicates, and Managing Agents

Triple-I’s latest Issues Brief, Lloyd’s: Trends and Insights, spotlights one of the world’s leading specialist insurance and reinsurance marketplaces. The brief explains how the nearly 350-year-old platform has functioned differently from the common stand-alone model while evolving into an integral source of capacity and resilience for the global 21st-century risk landscape.

Contrary to a common misperception, Lloyd’s is not a single insurer; rather it’s a marketplace – i.e. hub, network, platform – connecting risk brokers, underwriters, and capital providers who negotiate the transfer of risk. It consists of three core groups:

  • Members: Persons or corporate entities that provide the capital that funds a syndicate.
  • Syndicates: An accounting construct with assets, liabilities, and Profit and Loss (P&L) statement segregated from those of other Lloyd’s syndicates.
  • Managing Agents: Entities appointed by syndicate members to handle underwriting and claims, as well as oversee the governance and operations on behalf of the syndicates.

The arrangement allows policies to have multiple underwriters, enabling each underwriter to  take on more risk than they would have the appetite for as a sole underwriter. As a result, complex and hard-to-place risks can be covered.

​Another distinctive feature of Lloyd’s is its capital structure, also known as the “Chain of Security.”  The brief explains how the Chain of Security is designed to provide the financial backing for all insurance policies written at Lloyd’s. As a result of this setup, the major rating agencies typically apply a single financial strength rating (FSR) to all the policies written through Lloyd’s, regardless of which syndicates participate in the policy.

Successful handling of long-tail and complex risks –  where claims may emerge decades later  –  can be vital to fostering confidence in the larger insurance industry. Throughout its long history, Lloyd’s has been called upon to absorb extreme and unexpected losses while paying claims and recapitalizing. This track record includes playing a key role in supporting U.S. economic recovery, from major disasters, such as the 1906 San Francisco earthquake, the September 11 attacks, Hurricane Katrina, and more recent hurricanes and wildfires.

Managing uncertainty in today’s fast-evolving risk landscape can require keeping abreast of interconnected threats that outpace traditional risk management strategies. Insurers and risk managers can improve the prediction and prevention of emerging threats across core strategic areas:

  • ​advancing analytics capabilities
  • strengthening capital resilience
  • collaborating across the industry

Centering these objectives, Lloyd’s cultivates channels for talent development, innovation, and new capital flows.

For example, its London Bridge 2 (LB2) platform gives institutional investors a flexible and efficient means to deploy funds into the Lloyd’s market, attracting approximately $2.5 billion in new capital since its launch in 2022. Lloyd’s education platform supports the sustainable growth of the market by equipping professionals with the insight needed to navigate the emerging risk landscape. And, Lloyd’s Lab – a product development accelerator designed to rapidly develop, test, and refine new products, concepts, and solutions – supported 48 U.S. startups, which collectively have raised $490 million to scale solutions tackling wildfire, flood, and cyber risks.

The United States is Lloyd’s largest market, accounting for roughly half of the marketplace’s global premiums. Excess and surplus underwriting accounts for over 60 percent of Lloyd’s total premiums written in the U.S. In 2024, this share worked out to $20.8 billion in surplus lines insurance capacity, approximately 16 percent of the entire U.S. surplus lines market.  Additionally, Lloyd’s gross written premiums for U.S. reinsurance totaled $9.86 billion in 2024, with the marketplace ceding around $2.9 billion annually in reinsurance premiums to U.S. reinsurers.

This special edition of the Triple-I issue brief series is part of ongoing efforts to educate and raise awareness about how insurance market participants support coverage affordability and availability.

Homeowners Insurance, Insurers and the Economy, Legal Environment

Take Care in Addressing Homeowners’ Premiums, Bloomberg Cautions Policymakers

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By Jeff Dunsavage, Senior Research Analyst, Triple-I

While rising homeowners’ insurance can be a problem for some consumers, a recent Bloomberg editorial cautions policymakers against pursuing “simplistic solutions, such as capping premiums, subsidizing homebuyers, or punishing investors.”

Instead, it recommends taking steps to increase investment in catastrophe resilience and mitigate claim cost drivers, such as legal system abuse.

Bloomberg attributes slumping condominium prices and rising rents, in part, to increasing homeowners’ insurance premiums.

“Average homeowners insurance premiums rose almost 25 percent from 2019 to 2024 in real terms,” the editorial says. While politicians “have been quick to blame greedy insurers,” the reality is more complicated. Contributing factors include:

  • Increasingly costly disasters – evidenced by a sharp increase in billion-dollar catastrophes. In 2025, Bloomberg says, insured losses from such calamities reached $108 billion.
  • Insufficient investment by states in disaster resilience measures, “such as retrofitting public works and enforcing appropriate building codes”.
  • Escalating legal costs that are passed on to homeowners.

“In many states,” Bloomberg says, “underwriters must contend with laws that favor plaintiffs, outsized jury awards, and a proliferation of funds that specialize in financing lawsuits. Research suggests that such costs have been the single biggest driver of premium increases in recent years.”

Also feeding higher premiums are increased replacement costs related to record inflation during and since the COVID-19 pandemic.

In attempts to address these rising costs, several states in recent years have introduced legislative measures that would do more harm to homebuyers than good. Illinois insurers last year narrowly avoided increased government involvement in insurance pricing as state legislators rejected “an extreme prior-approval system found nowhere else in the country,” according to a joint statement from the American Property Casualty Insurance Association, the National Association of Mutual Insurance Companies, and the Illinois Insurance Association.

When California tried to artificially suppress premiums, “underwriters fled the market and left homeowners and the state’s insurer of last resort exposed to last year’s horrific wildfires”.  Since then, the state has allowed significant premium rate increases to lure insurers back.

Bloomberg recommends that states start by prioritizing the resilience of buildings and public works.

“Tax breaks and grants for hardening homes against floods, fire, and wind are a short‑term expense with long‑term benefits,” the editorial says, citing research that found communities lose as much as $33 in future economic activity for every $1 not invested in preparedness.

“The federal government, for its part, should commit to restoring FEMA’s pre‑disaster mitigation program and similar efforts,” Bloomberg says. “With strong oversight, such investment can protect property, limit job losses, accelerate rebuilding, reduce premiums, improve public health, and ultimately save money and lives.”

When it comes to litigation trends that put upward pressure on claim costs and, ultimately, premium rates, Florida offers an encouraging example.

“In 2021, the state was home to 6.9 percent of homeowner claims but 76 percent of the lawsuits against insurers,” Bloomberg says. “State lawmakers enacted reforms over the next two years that limited plaintiffs’ ability to allege negligence and recoup expenses, with significant results: At least 17 new insurers entered the market and dozens reduced premiums.”

Triple-I, its members, and its partners have long been engaged in helping policymakers and the public understand the forces that affect insurance affordability and availability and how they can help mitigate the factors that drive up costs.  

“It’s refreshing to see this type of thoughtful analysis of the homeowners’ insurance market by an authoritative financial news organization like Bloomberg,” said Triple-I CEO Sean Kevelighan.  “Consumers and policymakers need to understand that higher premiums are a symptom of the current risk environment, not its cause.”

Learn More:

Triple-I Testifies on New York Insurance Affordability

Florida Governor Touts Auto Insurance Rebates, Tort Reform Success

Resilience Investment Payoffs Outpace Future Costs More Than 30 Times

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

Allstate, Aspen Initiative Seeks to Ease Trust Gap

Illinois Lawmakers Reject Risk-Based Pricing Challenge

New Illinois Bills Would Harm — Not Help — Auto Policyholders

Insurance Affordability, Availability Demand Collaboration, Innovation

Disasters, Litigation Reshape Homeowners’ Insurance Affordability

Tariff Uncertainty May Strain Insurance Markets, Challenge Affordability

Affordability, Auto Insurance, Insurers and the Economy, Legal Environment

New York Among
Least Affordable States for Auto Insurance

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By Lewis Nibbelin, Research Writer, Triple-I

New Yorkers pay the fourth-highest personal auto expenditures in the United States, costing households an average of $1,935 in 2024, or 2.23 percent of the state’s median household income, according to Triple-I’s latest Affordability Outlook.

Up from New York’s average of $1,753 in 2023, Triple-I’s estimates reflect the burgeoning toll of several expenditure cost drivers in the Empire State, many of which are structural factors beyond the insurance industry. Citing data from the Insurance Research Council (IRC) – like Triple-I, an affiliate of The Institutes – the report highlights four cost drivers that rank among the highest in the country, including:

  • Repair costs: New York has the third-highest auto repairs costs in the United States, at $864 more than the national average;
  • Carrier expense index: New York has the third-highest carrier expense index for personal auto insurance, at 14.9 percent of losses;
  • Injury claim costs: New York has the third-highest average injury claim severity in the country, at more than twice the national average; and
  • Accident frequency: New York has the eighth-highest average frequency of personal auto accidents in the nation, at 3.09 accidents.

While traffic density, road conditions, and driver education can contribute to accident frequency and severity, excessive and fraudulent claims litigation also fuel rising auto insurance premiums and overall costs in the state. Wiping out billions of dollars in U.S. economic activity annually, legal system abuse costs New York residents 427,794 jobs and $7,027 for each household per year, earning the state a recurring spot on the American Tort Reform Foundation’s list of “judicial hellholes.”

A surge in staged crashes underpins these figures, leaving drivers increasingly vulnerable to fraudulent damage or injury claims. Such incidents – totaling 1,729 in New York in 2023 – keep upward pressure on auto rates for all policyholders, inflating average auto premium by as much as $300 per year, Triple-I estimates.

To alleviate these cost burdens, a package of state budget proposals was recently unveiled to secure $2 million in funding for investigations into alleged auto fraud and introduce new regulations that extend the timeframe for carriers to report suspicious claims. Another law would cap pain and suffering damages awarded to drivers who engaged in criminal behavior, such as those who were uninsured at the time of the incident.

New York policymakers also passed legislation last month aimed at third-party litigation funding (TPLF), or funding from often anonymous investors who can delay prompt settlements in exchange for a share of larger damage awards, thereby propelling claims costs. Though falling short of mandating TPLF disclosure during litigation, the new law parallels effective tort reforms in other states, offering hope toward insurance market stability.

Homeowners insurance holds steady

Conversely, New York’s homeowners insurance premiums “are relatively average and reasonable as a percentage of household income,” contradicting “the narrative of an affordability crisis in New York’s homeowners insurance market,” said Patrick Schmid, Triple-I’s chief insurance officer, in written testimony to state lawmakers.

With a 2.11 percent ratio of homeowners insurance expenditure to median household income, New York ranks 29th in an affordability study by the IRC, suggesting property and replacement costs contribute to the state’s housing affordability issues.

Policy interventions in insurance markets “would address a symptom rather than the cause” of such issues, Schmid stressed, urging lawmakers to focus instead on improving building material and labor costs; litigation trends; and other inflationary pressures.

While the specific policy levers may differ, Florida’s legal reforms in 2022 and 2023 led to 17 new insurance companies entering the state and rate reductions for dozens of homeowners and auto insurers, including a 6.5 percent average rate decrease for the state’s top five personal auto insurers in 2025.

Once a “poster child” for legal system abuse, Florida’s success demonstrates the need for continued reform in 2026 to promote a more competitive insurance market and greater affordability for consumers.

Learn More:

Triple-I Testifies on New York Insurance Affordability

Florida Governor Touts Auto Insurance Rebates, Tort Reform Success

Litigation Reform Works: Florida Auto Insurance Premium Rates Declining

Insurance Affordability, Availability Demand Collaboration, Innovation

Disasters, Litigation Reshape Homeowners’ Insurance Affordability

Auto Insurance, Business Insurance, General Liability, Homeowners Insurance, Insurers and the Economy, Market Conditions, Workers Compensation

Resilient U.S. P/C Market Performance Sets Stage for a Complex 2026

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By William Nibbelin, Senior Research Actuary, Triple-I 

The U.S. property/casualty insurance industry demonstrated notable resilience throughout 2025, navigating a landscape marked by significant regional catastrophes and shifting economic pressures, according to the latest Insurance Economics and Underwriting Projections: A Forward View report from Triple-I and Milliman.

As the industry moves into 2026, the report notes, it does so from a position of historical strength yet faces an increasingly nuanced outlook shaped by market softening and lingering macroeconomic uncertainties.

The Triple-I/Milliman report is based on data through the third quarter of 2025,

Industry-Wide Performance and Profitability

The P/C insurance industry is forecast to achieve its lowest net combined ratio (NCR) in over a decade for the full year 2025. This achievement is particularly significant, given the challenges faced early in the year, including the devastating Los Angeles wildfires in January 2025.

A key driver of this success was the first Atlantic hurricane season with no U.S. landfall in 10 years. However, while profitability reached peak levels, top-line growth began to moderate. Aggregate net premium growth across all lines for 2025 is expected to be 5.9 percent, reflecting a continued slowing of the growth rate compared to 2024.

“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,” said Patrick Schmid, Ph.D., chief insurance officer at Triple-I. “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.”

Economic Outlook: Stability Meets Vulnerability

While the broader U.S. economy and the P/C sector remain stable, economists are keeping a close watch on emerging risks. The industry’s ability to maintain its momentum in 2026 may be tested by rising political and geopolitical tensions, as well as potential shifts in the labor market.

“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 further highlighted that the labor market serves as a critical indicator, noting that a rise in the unemployment rate toward 5.0% over the next six months could potentially trigger an economic contraction.

Underwriting Results by Line of Business

Personal lines continue to anchor the industry’s profitability. Personal auto remains a standout performer with a forecast 2025 NCR of 94.4, an improvement over 2024 results. However, premium growth in this sector has slowed significantly, with net written premium growth expected to land at 3.6 percent — its lowest level since 2020. Homeowners’ insurance also showed remarkable recovery. Despite the heavy losses from the Los Angeles fires in the first quarter, the line’s 2025 NCR is forecast at 99.6, placing it on par with 2024 performance.

Commercial lines continue to face ongoing challenges in liability. While most of the industry enjoys profitability, general liability and commercial auto remain the only major lines forecast to stay above a 100 NCR for 2025. General liability continues to struggle with the highest Q3 direct incurred loss ratio reported in over 15 years.

Jason B. Kurtz, FCAS, MAAA, principal and consulting actuary at Milliman, detailed these persistent hurdles.

“General liability faces continued challenges,” Kurtz said. “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 added, “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 remains the strongest performing major line, with NCRs forecast to stay in the high 80s to low 90s through 2027. This sustained success is attributed to disciplined risk management and favorable 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.”