US Property and Casualty Insurers Post Best Results Since 2013

The US property and casualty insurance sector recorded its strongest underwriting performance since 2013, with a net combined ratio (NCR) of 96.6 for 2024—a 5.1-point year-over-year improvement—according to a joint report by the Insurance Information Institute (Triple-I) and Milliman. The report, Insurance Economics and Underwriting Projections: A Forward View, highlighted broad-based gains in both personal and commercial lines but cautioned that 2025 may bring headwinds from California wildfire losses and the economic impact of tariffs.

The personal auto segment saw the most-notable progress, achieving a 2024 NCR of 95.3—improving 9.6 points year over year—on the back of 14.4 percent and 12.8 percent growth in net written premiums (NWP) for 2023 and 2024, respectively. The homeowners segment reported an NCR of 99.7, its first sub-100 reading since 2019, improving by 11.2 points from 2023. Its 2024 NWP growth of 13.6 percent was the highest in over 15 years.

Commercial lines remained profitable overall, but general liability weakened, posting its worst NCR since 2016. The January 2025 wildfires in Los Angeles County are expected to result in the worst first-quarter performance in more than 15 years for the sector.

Tariffs imposed as of early May 2025 are showing early signs of reducing growth and increasing replacement costs. These effects are first appearing in personal auto and are expected to cascade to homeowners, renters, commercial auto, and commercial property.

Michel Léonard, chief economist and data scientist at Triple-I, said, "While P/C economic drivers continue to outperform the broader US economy—with stronger growth and lower replacement cost inflation—we now anticipate a shift in 2025 due to ongoing and expanded tariffs."

Mr. Léonard said replacement cost inflation, which was projected at 1.0 percent year over year compared to a 2.0 percent US Consumer Price Index increase, may begin to accelerate and potentially outpace the broader index. Although this may lead to premium increases, he warned they may not be sufficient to offset reduced consumer and corporate spending.

Jason B. Kurtz, principal and consulting actuary at Milliman, said general liability lines experienced significant reserve strengthening in 2024. "The 2024 net combined ratio of 110 included a staggering 9 points of adverse prior year development, amounting to more than $9 billion of reserve strengthening, the highest seen in at least 15 years."

Commercial auto and general liability lines have now seen 3 consecutive years of adverse prior year development, weighing on sector profitability.

Meanwhile, workers compensation continued to outperform. Mr. Kurtz said the line benefited from favorable reserve development for the eighth straight year. Donna Glenn, chief actuary at the National Council on Compensation Insurance, said, "The workers compensation system continues an era of exceptional performance with strong results and a financially healthy line."