Triple-I and Milliman: US Property and Casualty Underlying Growth Seen at -3.7% in 2026's First Half Despite the Best Underwriting Results in a Decade

The US property and casualty insurance industry just had its most profitable underwriting year in more than a decade, but its growth is about to turn negative, according to the Insurance Information Institute (Triple-I) and the actuarial firm Milliman. Their briefing, titled "P&C Economics and Underwriting Projections: A Forward View," was reported by Reinsurance News on May 18, 2026. This article summarises the report as published. An earlier version of this article gave a net written premium growth figure of 3.6% for 2025 that does not appear in the report and has been removed. The only premium growth figure given in the source concerns personal auto, at 4.0%.

The headline number is underlying growth, which strips out the effect of price changes in a way that shows how much real business the industry is writing. The forecast is for underlying growth of negative 3.7% in the first half of 2026, down from 1.6% in 2025. The authors cite catastrophe exposure, inflationary pressures and rising claims costs as the drivers. They expect a recovery in 2027 and 2028, with continued pressure from economic uncertainty and elevated loss trends. The projection is a forecast and depends on assumptions about the economy and weather.

The profit side looks very different. The industry's net combined ratio, a measure that compares claims and expenses with premiums, was the lowest in more than a decade in 2025. Personal auto improved by 3.5 points from a year earlier to 91.8. Homeowners reached 88.1, the strongest underwriting result in more than ten years, despite catastrophe activity that included the Los Angeles wildfires. The report credits easing replacement-cost pressures and earlier pricing actions for the improvement. These figures are consistent with the S&P Global Market Intelligence analysis of the best first-quarter result in 25 years, which we have reported separately.

Premium growth in personal auto has slowed. Net written premium growth in personal auto was 4.0% in 2025, its lowest since 2021, and the briefing expects underwriting conditions to stay favourable into 2026. That fits with what insurers' own results show: Progressive's recent quarter, for example, showed policies growing faster than premiums, which usually means average prices are flat or falling.

Replacement costs are another focus. These are the costs of repairing or rebuilding insured property. The forecast is for replacement cost growth of 2.1% in the first half of 2026, unchanged from 2025. Patrick Schmid of Triple-I says that inflation in replacement costs has eased from its 2022 peak, but the forecasts show it re-accelerating through 2028 and eventually outpacing overall US inflation. For insurers, rising replacement costs mean higher claims in future even if current results look good, so profitable years can be followed by pressure.

Commercial lines show a split. General liability and commercial auto are expected to be the only major lines with a net combined ratio above 100 through 2026, meaning that they still lose money on underwriting, with gradual improvement in the years after. Jason Kurtz of Milliman says litigation pressures and claims severity trends continue to result in elevated loss costs. Workers' compensation is expected to be among the strongest performers from 2026 to 2028, with combined ratios in the low 90s. The National Council on Compensation Insurance, however, put the preliminary 2025 calendar-year workers' compensation combined ratio at 91, up about 5 points from the prior year, mainly because of higher loss and underwriting expense ratios. Donna Glenn of NCCI is quoted on that number.

The economy and employment provide context. The briefing says real GDP growth slowed to 2.0% in the first quarter of 2026 and consumer price inflation was 3.3% in March, above the Federal Reserve's long-term target. Insurance employment fell 1.8% year on year in March, underperforming the broader labour market. Michel Léonard of Triple-I said that insurers continue to operate in an environment marked by elevated catastrophe risk.

What should readers take from this? For consumers, strong industry profits do not guarantee lower premiums. Prices depend on expected future costs, and the report suggests costs will rise again as replacement costs accelerate. In auto and homeowners, there is room for competition, but liability costs are still high. For businesses buying commercial insurance, general liability and commercial auto are likely to stay under pressure, while workers' compensation looks more stable. For investors, the combination of record underwriting results and negative growth means earnings may be near a cyclical peak, although the report does not make that claim.

It is also worth noting what the report does not say. It does not give an industry-wide premium growth number, it does not forecast individual companies, and the first-half figure is a projection, not a result. Later data, including the third-quarter results of Travelers and Progressive covered in this series, show that margins remained strong through the autumn, so the forecast negative growth did not prevent profitable results. Readers who want the full forecast tables should consult the Triple-I and Milliman briefing itself.