The U.S. property and casualty (P&C) insurance industry is improving, with key economic drivers stabilizing, claims cost pressures easing and underwriting conditions favorable, according to a new report from the Insurance Information Institute (Triple-I) and Milliman.
The report found that despite looming geopolitical risks and severe weather events, underwriting performance in major insurance segments is expected to outpace growth in the overall U.S. economy through 2028.
Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I, said: “Our latest economic forecast for the property and casualty insurance industry has improved since earlier this year.
“P&C base growth is a key economic driver of existing and new business premium growth and is expected to outpace overall U.S. GDP growth by 2028. Even with this momentum, we still see significant risks to P&C economic drivers, particularly through the remainder of 2026, including but not limited to inflationary pressures from conflict in the Persian Gulf.”
According to Triple-I’s current forecast, these geopolitical tensions will ease in the second half of this year, but uncertainty remains high.
Performance varies widely across insurance lines. Personal lines delivered strong underwriting results in the first quarter of 2026, a trend expected to continue through the end of the year.
However, homeowners insurance outcomes face higher uncertainty due to increased catastrophe risk. For commercial lines, real estate-related lines performed well in the first quarter. Loss rates remain high in liability lines such as general liability and commercial auto.
Worker compensation remains in a strong position, benefiting from stable employment and wage trends, and favorable underwriting conditions.
“Underwriting performance continues to strengthen across much of the property and casualty insurance industry,” said Dr. Patrick Schmid, chief underwriting officer at Triple-I. “That said, each insurance line responds differently to ongoing claims drivers such as economic conditions, abuse of the legal system, and changing risk exposures, making disciplined underwriting and risk-based pricing critical to long-term market stability.”
“General liability and commercial auto lines continue to face the greatest underwriting challenges, reflecting continued loss cost pressures that continue to impact underwriting performance despite broader improvements in the property and casualty insurance industry,” said Jason B. Kurtz, FCAS, MAAA, principal and consulting actuary at Milliman. “Based on first-quarter results, we see continued increases in loss ratios for these lines.”
The report shows that workers’ compensation remains highly resilient and well-positioned to continue to deliver good underwriting performance due to stable employment, steady wage growth and favorable loss trends.
Stephen Cooper, NCCI practice leader and senior economist, highlighted three trends that NCCI is watching closely.
“Overall, improvements in employment and containment of medical inflation are positive signs for workers’ pay,” Cooper said. “Rising interest rates and potential frequency pressures are areas of concern.”
