Property and Casualty Insurance Industry Forecasts Profitability and Growth in 2025

The US property-casualty (P&C) insurance industry is projected to grow faster than the broader economy in 2025 and is expected to post underwriting profitability for a second consecutive year, according to a joint briefing by the Insurance Information Institute (Triple-I) and Milliman. 

Michel Léonard, chief economist and data scientist at Triple-I, said, "P&C economics and the US economy have outperformed expectations in 2025. Even though the tariffs' impact is less severe than originally expected, the question remains whether the full negative impact has been avoided or simply pushed back to 2026." 

The report highlighted several contributing factors to the industry's positive trajectory. Premium volumes are being driven up by stronger-than-expected underlying growth, while replacement costs are rising more slowly than overall inflation. However, the outlook for 2026 remains uncertain due to continued risks, including tariffs, labor market softening, and inflation. 

The industry returned to underwriting profitability in 2024 for the first time since 2020 and is on track for continued profitability in 2025, albeit at a reduced level. 

Economic growth is expected to slow to 1.6 percent in 2025, below the Federal Reserve's target. In contrast, the property/casualty sector is forecast to grow by 2.4 percent. Replacement costs for insurers are projected to increase to 2.2 percent in 2025, up from 1.4 percent in 2024, but still remain below the overall inflation rate. 

The homeowners coverage line is expected to remain unprofitable in 2025, though projections have improved from earlier estimates. Personal auto is projected to maintain profitability, with slight improvement in its net combined ratio forecast. General liability (GL) remains the only major line forecasted to stay unprofitable in the near term, with an expected net combined ratio of 107.1 in 2025. 

Jason B. Kurtz, principal and consulting actuary at Milliman, said, "We see underwriting losses continuing in 2025... Forecasted net written premium growth of 8.0 percent is 4.8 points above 2024 as premiums respond to recent performance. While we expect slight improvement in 2026–2027, we estimate GL combined ratios to remain above 100." 

Patrick Schmid, chief insurance officer at Triple-I, said, "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." Net written premium growth for personal lines is expected to remain one point higher than commercial lines in 2025 but is forecast to align by 2027. 

Workers compensation continues to outperform other lines. Donna Glenn, chief actuary at NCCI, said, "If this holds, it will represent 12 consecutive years of combined ratios under 100 for private carriers."