The U.S. property/casualty insurance industry reported its best underwriting results since 2013, with a net combined ratio of 96.6 in 2024, according to a report from the Insurance Information Institute (Triple-I) and Milliman. However, the positive trend might face challenges in 2025 due to losses from California wildfires and potential economic impacts from tariffs.
In 2024, personal lines closed the profitability gap with commercial lines, both reporting net combined ratios under 100. Personal auto improved significantly with a net combined ratio of 95.3, supported by strong growth in net written premiums over the past two years. Homeowners also showed improvement with a net combined ratio of 99.7 and experienced its highest growth rate in net written premiums in over 15 years.
Challenges remain as general liability posted its worst results since 2016, and January's wildfires in Los Angeles County are expected to impact first-quarter performance negatively. Tariffs could further affect underlying growth and replacement costs across various insurance sectors.
Michel Léonard of Triple-I highlighted that while property/casualty economic drivers have outperformed the broader U.S. economy, ongoing tariffs could slow momentum and potentially lead to a contraction later in the year. He noted that rising costs might not be fully offset by premium increases due to slowing consumer spending and corporate investment.
Jason B. Kurtz from Milliman pointed out that adverse prior year development continues to hinder profitability for commercial auto and general liability, with significant reserve strengthening seen in these areas during 2024.
Donna Glenn from the National Council on Compensation Insurance commented on workers’ compensation maintaining strong performance but acknowledged potential challenges ahead.
The report "Insurance Economics and Underwriting Projections: A Forward View" is available exclusively to Triple-I members and Milliman customers, though news media can request copies for reporting purposes.