AM Best maintains a stable outlook for the U.S. commercial insurance market, citing the segment’s strong underwriting and overall operating results, despite differences across business lines.
Other factors supporting AM Best’s stable outlook include continued strength in risk-adjusted pricing and improving investment returns, which are improving operating profitability, particularly for long-tail casualty lines.
U.S. commercial insurers overall reported good underwriting and operating performance through the first three quarters of 2025, as evidenced by the fact that the combined combined ratio remained in the mid-90% range.
Taking all this into account, the ratings agency expects most operators in this segment to maintain healthy risk-adjusted capital levels.
AM Best added: “The stable outlook also reflects the dynamics and respective stable outlooks in key commercial segments, including commercial real estate, workers’ compensation, surety, medical professional liability and others.”
AM Best director Alan Murray commented: “The stable outlook for the commercial lines reflects our expectation that the U.S. commercial lines business will generally remain profitable and remain resilient in the face of near-term and longer-term challenges.”
Carlos Wong-Fupuy, senior director at AM Best, said: “Commercial insurers are leveraging technology and innovative products, including artificial intelligence, to enhance underwriting and pricing decisions.
“At the same time, a more direct focus on loss control and claims management has resulted in reduced claim frequency and severity.”
The ratings agency also flagged a number of near-term concerns that could become problematic, including a rise in casualty claims reflecting the multi-year impact of social inflation, and persistently high property claims costs.
AM Best further pointed out that intensified geopolitical risks and near-term policy uncertainty, especially the impact of tariffs, will create additional headwinds through inflation and supply chain uncertainty.