The U.S. property/casualty (P/C) market in 2024 is forecast to have continued its trajectory of improving underwriting results, 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. Further premium growth and improved underwriting performance should continue in 2025 and 2026, provided geopolitical and economic conditions remain relatively stable.
Key Performance Indicators
– – Economics: P/C underlying economic growth ended 2024 slightly below U.S. GDP growth at 2.3% versus 2.5% year-over-year (YOY). However, in 2025 and 2026, P/C underlying growth is expected to be above overall GDP growth, an improvement in year-end expectations. A further economic milestone occurred in 2024 with the number of people employed in the U.S. insurance industry surpassing three million.
– – Underwriting: P/C net combined ratio (NCR) estimate of 99.5 is a YOY improvement of 2.2 points, while net written premium (NWP) is estimated to increase 9.5% YOY. Personal lines 2024 NCR estimate improved by nearly 1 point relative to our prior estimates, primarily due to better-than-expected Q3 performance in personal auto. Commercial lines 2024 NCR estimate increased by 1.2 points due to commercial property and general liability. NWP growth rate for personal lines is expected to continue to surpass commercial lines by 9 points in 2024.
Additional Report Highlights
– – Personal lines: Personal auto projected 2024 NCR of 98.8 is 6.1 points better than 2023, with 2024 NWP growth rate of 14.0% the second highest in over 15 years. Homeowners projected 2024 NCR of 104.8 is a 6.1-point improvement over 2023 despite an above-normal hurricane season.
– – Commercial lines: Commercial property projected 2024 NCR of 91.2 is 3.3 points worse than 2023, with Hurricane Milton projected to be the worst catastrophe for commercial property insurance since Hurricane Ian in 2022 Q3. General liability projected 2024 NCR of 103.7 is 3.6 points worse than actual 2023 experience.
“Commercial lines continue to have better underwriting results than personal lines, but the gap is closing,” said Dale Porfilio, FCAS, MAAA, Triple-I’s chief insurance officer. “The impact from natural catastrophes such as Hurricane Helene in Q3 2024 and Hurricane Milton in Q4 2024 significantly impacted commercial property. The substantial rate increases necessary to offset inflationary pressures on losses have driven the improved results in personal auto and homeowners,” he added.
Turning to workers’ compensation, Donna Glenn, FCAS, MAAA, chief actuary at the National Council on Compensation Insurance (NCCI), provided a preview of this year’s average lost cost level changes and discussed the long-term financial health of the workers compensation system.
“The 2025 average loss cost decrease of 6% is moderate, which will inevitably have implications on the overall net written premium change,” Glenn said. She added that the –6% average loss cost level change in 2025 is notably different than was seen in 2024: an average decrease of more than 9%, representing the largest average decrease since before the pandemic.
“Payroll for 2025 will develop throughout the year resulting from both wage and employment levels. Therefore, overall premium will become clearer as the year progresses,” Glenn said.