First-half economic and underwriting results for the U.S. property/casualty (P/C) industry have surpassed expectations, according to a new report from the Insurance Information Institute (Triple-I) and Milliman. The report, titled "Insurance Economics and Underwriting Projections: A Forward View," highlights an improvement in the net combined ratio (NCR), which stands at 99.4—a 2.3-point enhancement compared to last year.
The Federal Reserve's continued reduction of interest rates and stable geopolitical risks are cited as critical factors for sustaining this positive trajectory. Commercial lines continue to outperform personal lines, though the gap is narrowing.
Dale Porfilio, Triple-I's chief insurance officer, commented on the performance disparity between personal and commercial lines: “The ongoing performance gap between personal and commercial lines remains, but that gap is closing.” He also noted that significant rate increases are improving results in personal auto and homeowners sectors but warned of potential disruptions from natural catastrophes like hurricanes Helene and Milton.
In terms of specific sectors, homeowners saw a six-point NCR improvement over 2023, with profitability expected by 2026. Personal auto NCR improved by 4.9 points from last year, while commercial lines remained steady at an NCR of 97.1.
Jason B. Kurtz from Milliman expressed concerns about commercial auto and general liability remaining unprofitable through at least 2026 but highlighted robust performance in workers' compensation: “The expected 2024 net combined ratio of 88.8 would mark the 10th consecutive year of expected underwriting profitability.”
Donna Glenn from the National Council on Compensation Insurance echoed this sentiment regarding workers' compensation: “The workers’ compensation line is expected to have another strong year with continued underwriting gains in 2024.”
Michel Léonard of Triple-I discussed P/C replacement costs outpacing overall inflation in future projections: “P/C carriers benefited from a ‘grace period’... That won’t be the case in 2025.”
The quarterly report "Insurance Economics and Underwriting Projections: A Forward View" is available exclusively to Triple-I members and Milliman customers, though media can request copies for reporting purposes.