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Triple-I/Milliman: 2025 US P/C Insurance Outlook Shows Strength in Personal Auto, Ongoing Pressure in General Liability Lines

via Business Wire

The U.S. property/casualty (P/C) insurance industry began 2025 with a mixed underwriting outlook, according to the latest report, Insurance Economics and Underwriting Projections: A Forward View, from the Insurance Information Institute (Triple-I) and Milliman, a collaborating partner. Personal auto insurance remains a bright spot, while general liability insurance continues to face ongoing profitability concerns.

Key Highlights by Segment:

  • Personal Auto

    The 2025 net combined ratio (NCR) for personal auto is forecast at 96.0, approximately 1 point higher than 2024 but on track to achieve continued profitability.
  • Homeowners

    The Los Angeles wildfires in January 2025 contributed significantly to industry losses. The Q1 2025 loss ratio was the worst first-quarter performance for homeowners in over 15 years and the worst of any quarter since Q2 2011.
  • General Liability

    The Q1 2025 general liability loss ratio was the second worst first quarter in 15+ years, less than a 1-point improvement from Q1 2024, and signifying continuing profitability concerns.

Industry Trends and Economic Influences

  • Premium Growth Outlook:

    The overall 2025 net written premium growth rate is forecast at 6.8%, down 2.0 points from 2024, and the lowest since 2020. Personal lines growth is expected to exceed commercial lines by 1.5 percentage points in 2025, although the gap is forecast to narrow by 2027.
  • Profitability Outlook:

    The industry-wide NCR forecast for 2025 is 99.3, up 2.7 points from 2024. Despite line-specific challenges, 2026 is expected to return to broader profitability.

Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I, noted that “the U.S. economy and P/C industry have been resilient in the face of tariffs and trade uncertainty. The insurance industry's economic growth drivers continue to outperform overall U.S. GDP growth.”

However, he cautioned that as revised economic data for the first half of the year becomes available this summer, a weaker picture of the U.S. economy may emerge, and concerns over contraction or even recession could become more widespread heading into the fall.

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

Léonard said that increases in prices due to tariffs and other economic drivers have been most severe for personal auto, with the price of used cars and trucks increasing 7.7% in the first half of this year. The P/C industry typically lags the wider economy by one to two quarters, pointing to a potential broader economic contraction impacting the industry starting in Q1 or Q2 of 2026.

Jason B. Kurtz, FCAS, MAAA, a principal and consulting actuary at Milliman, a premier global consulting and actuarial firm, noted that for commercial auto, 2025-2027 are forecast to remain unprofitable, despite the continuation of a double-digit net written premium growth estimate in 2025.

“For general liability, the NCR is expected to improve in 2026-2027 but remain unprofitable. It is worrisome that the first quarter 2025 direct incurred loss ratio was only marginally improved relative to the first 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.”

Turning to workers’ compensation, Kurtz said that the forecasted 2025 NCR of 90.6 is 1.0 point improved from our prior estimate, as the Q1 2025 loss ratio was the lowest in more than 15 years.

Stephen Cooper, executive director and senior economist at the National Council on Compensation Insurance (NCCI), discussed the labor market and its impact on the workers’ compensation system.

“With economic uncertainty elevated and recession concerns resurfacing, consumer behavior will be important to watch,” said Cooper. “While employment has been concentrated amongst fewer industries, the labor market has shown resilience and continued strong payroll growth for workers’ compensation.”

Note to News Media:

Insurance Economics and Underwriting Projections: A Forward View is a quarterly report offered exclusively to Triple-I members and Milliman customers. Members of the media may request copies for reporting purposes only.

About the Insurance Information Institute (Triple-I)

Since 1960, the Insurance Information Institute (Triple-I) has been the trusted voice of risk and insurance, delivering unique, data-driven insights to educate, elevate and connect consumers, industry professionals, policymakers and the media. An affiliate of The Institutes, Triple-I represents a diverse membership accounting for nearly 50% of all U.S. property/casualty premiums written. Our members include mutual and stock companies, personal and commercial lines, primary insurers and reinsurers – serving regional, national and global markets.

About The Institutes

The Institutes® are a global not-for-profit comprising diverse affiliates that educate, elevate and connect people in the essential disciplines of risk management and insurance. Through products and services offered by The Institutes’ nearly 20 affiliated business units, people and organizations are empowered to help those in need with a focus on understanding, predicting and preventing losses to create a more resilient world.

The Institutes is a registered trademark of The Institutes. All rights reserved.

About Milliman

Milliman leverages deep expertise, actuarial rigor, and advanced technology to develop solutions for a world at risk. We help clients in the public and private sectors navigate urgent, complex challenges—from extreme weather and market volatility to financial insecurity and rising health costs—so they can meet their business, financial, and social objectives. Our solutions encompass insurance, financial services, healthcare, life sciences, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. For further information, visit www.milliman.com.

"The U.S. economy and P/C industry have been resilient in the face of tariffs and trade uncertainty. The insurance industry's economic growth drivers continue to outperform overall U.S. GDP growth.”

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