The US property and casualty (P&C) insurance sector is expected to maintain positive underwriting results in 2026, despite continued pressures from claims costs, natural catastrophes and economic uncertainty.
This is according to the Insurance Information Institute (Triple-I), a US organisation specialising in insurance research and economic analysis, and Milliman, an actuarial and consulting firm, in their latest members-only webinar, Insurance Economics and Underwriting Projections: A Forward View.
The outlook from Triple-I and Milliman indicates that the sector is likely to remain relatively stable over the coming years, although growth could slow temporarily in 2027 as monetary policy and replacement costs influence insurers’ performance.
Underlying P&C growth, a key driver of new business premium volumes, is expected to exceed gross domestic product (GDP) growth in 2026 and 2028, before falling below the wider economic growth rate in 2027. Triple-I forecasts that P&C replacement costs will rise more slowly than overall inflation in 2027 before increasing at a faster rate in 2028.
Triple-I expects the US Federal Reserve to tighten monetary policy during 2027, potentially slowing GDP growth and P&C underlying growth in 2027 and 2028, particularly in homeowners insurance. Geopolitical uncertainty also remains a concern. Although the inflationary effects associated with oil prices have not intensified significantly over the past three months, Triple-I warns that the outlook could change as winter energy demand increases.
“Our latest economic outlook points to greater stability for the P&C industry, but with a temporary slowdown in 2027,” commented Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I. “While underlying economic conditions remain supportive, monetary policy, replacement costs and geopolitical uncertainty will continue to shape the industry’s growth trajectory through 2028.”
The sector’s net combined ratio (NCR), a measure of underwriting performance, is forecast to reach 94.0 in 2026, according to Triple-I. A ratio below 100 indicates an underwriting gain, while a figure above 100 indicates an underwriting loss. Triple-I and Milliman also expect annual net written premium (NWP) growth in commercial insurance lines to exceed personal lines by approximately three percentage points between 2026 and 2028.
Homeowners insurance continues to report strong underwriting results following several years of elevated claims costs, according to Triple-I. Preliminary loss estimates associated with Hurricane Isaias are not expected to materially affect overall profitability. However, the organisation notes that the Atlantic hurricane season continues until 30 November, leaving the possibility of further storms that could significantly affect underwriting results.
Triple-I forecasts homeowners NWP growth of 6.4% in 2026, the lowest rate since 2020. The direct incurred loss ratio for the first half of 2026 was 49%, marking the strongest first-half result in more than a decade. The improvement partly reflects lower catastrophe losses compared with the same period in 2025, when the Los Angeles wildfires significantly affected homeowners insurance performance.
Despite these improvements, Triple-I highlights the sector’s continued exposure to natural catastrophes, which can cause substantial fluctuations in underwriting results between quarters and years.
Personal motor insurance premium growth is also expected to weaken in 2026. Triple-I forecasts personal auto NWP growth of -0.6%, a decline of 4.6 percentage points compared with 2025. This would be the second-lowest annual growth rate in more than 15 years, behind only 2020. The personal auto line’s NCR is forecast at 95.5 for 2026.
General liability and commercial motor insurance remain among the most challenging segments, according to Milliman, reflecting persistent claims-cost pressures. The consultancy expects the net combined ratios for both lines to remain above 100, indicating underwriting losses, although quarterly loss ratios for commercial motor insurance are showing early signs of improvement.
“General liability and commercial auto continue to present the greatest underwriting challenges, reflecting persistent loss-cost pressures,” added Jason B. Kurtz, FCAS, MAAA, principal and consulting actuary at Milliman. “We expect net combined ratios for both lines to remain above 100, although commercial auto quarterly loss ratios are showing early signs of improvement.”
Workers’ compensation continues to record comparatively strong underwriting performance. Triple-I forecasts an NCR of 92.7 for 2026, marking the 12th consecutive year of underwriting gains. NWP growth is expected to be -0.7% in 2026, with premium levels forecast to remain broadly stable in 2027 and 2028.
“After looking at loss costs, payroll, and the direct written premium change for the first half of 2026, overall 2026 net written premium is likely to be slightly lower than premium levels for 2025,” said Donna Glenn, chief actuary and product officer at NCCI. “These results and more are now available in our latest report, State of the Line—The Latest Results in 2026.”
“While underwriting results have improved, they need to be viewed in the context of several years of elevated loss costs and significant catastrophe losses,” noted Patrick Schmid, Ph.D., chief insurance officer at Triple-I. “Performance also varies considerably by line. Against that backdrop, maintaining underwriting strength is critical to ensuring insurers have the financial capacity to pay claims, absorb future catastrophe losses and support the availability of coverage.”
