First-half economic and underwriting results for the U.S. property/casualty (P/C) industry were better than expected, according to the latest forecasting report – Insurance Economics and Underwriting Projections: A Forward View – from the Insurance Information Institute (Triple-I) and Milliman, a collaborating partner.

The net combined ratio (NCR) estimate of 99.4 improved by 2.3 points year-over-year, with commercial lines continuing to outperform personal lines. Additionally, the Federal Reserve’s easing of monetary policy by continuing to lower interest rates and the stability of geopolitical risks will be key to maintaining the performance growth trend.

Highlights of the Triple-I/Milliman report include:

• Homeowners 2024 NCR of 104.9; a 6-point improvement over 2023. Profitability is expected in 2026 with continued expected double-digit net written premium (NWP) growth of 10% in 2025.
• Personal auto NCR of 100 is 4.9 points better than 2023. The 2024 NWP growth rate of 14.5% is the highest in over 15 years.
• Commercial lines 2024 NCR remained relatively flat at 97.1. Despite improvement in commercial property, commercial multi-peril and workers’ compensation, commercial auto and general liability continued to see deterioration.
• Personal Lines NWP growth is expected to continue to surpass commercial lines by nearly 9% points in 2024.

“The ongoing performance gap between personal and commercial lines remains, but that gap is closing,” said Triple-I chief insurance officer Dale Porfilio. “The significant rate increases necessary to offset inflationary pressures on losses are driving the improved results in personal auto and homeowners. With that said, the impact from natural catastrophes such as hurricanes Helene and Milton threaten the improved homeowners results and are a significant source of uncertainty.”

Jason B. Kurtz, FCAS, MAAA, a principal and consulting actuary at Milliman – a premier global consulting and actuarial firm – elaborated on profitability concerns within commercial lines.

“Commercial auto expectations are worsening and continue to remain unprofitable through at least 2026,” Kurtz said. “General liability has worsened and is expected to be unprofitable through 2026.”

Kurtz pointed out that the workers’ compensation line continues its robust performance. “The expected 2024 net combined ratio of 88.8 would mark the 10^th consecutive year of expected underwriting profitability. We continue to forecast favorable underwriting results through 2026,” he said.

Donna Glenn, FCAS, MAAA, chief actuary at the National Council on Compensation Insurance (NCCI), revealed preliminary results based on the first half of 2024.

“The workers’ compensation line is expected to have another strong year with continued underwriting gains in 2024, comparable to recent years, and a net premium volume similar to that observed in calendar year 2023,” Glenn said. Declining claim frequency, due to continuous emphasis on workplace safety, is cited as one of the factors driving these results.

Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I, discussed the pace of increase in P/C replacement costs, which are expected to overtake overall inflation.

Léonard noted that after a few quarters of P/C replacement costs increasing less than the overall Consumer Price Index, Triple-I forecasts P/C costs to increase faster than overall inflation in 2025.

“P/C carriers benefited from a ‘grace period’ over a few quarters during which replacement costs were increasing at a slower pace than overall inflation. That won’t be the case in 2025,” Léonard said.

Note to News Media:

Insurance Economics and Underwriting Projections: A Forward View is a quarterly report offered exclusively to Triple-I members and Milliman customers. Members of the media may request copies for reporting purposes only.

About Insurance Information Institute (Triple-I)

With more than 50 insurance company members — including regional, super-regional, national and global carriers — the Insurance Information Institute (Triple-I) is the #1 online source for insurance information in the U.S. The organization’s website, blog and social media channels offer a wealth of data-driven research studies, white papers, videos, articles, infographics and other resources solely dedicated to explaining insurance and enhancing knowledge.

Unlike other sources, Triple-I’s sole focus is creating and disseminating information to empower consumers. It neither lobbies nor sells insurance. Triple-I offers objective, fact-based information about insurance – information that is rooted in economic and actuarial soundness. Triple-I is affiliated with The Institutes.

About Milliman

Milliman leverages deep expertise, actuarial rigor, and advanced technology to develop solutions for a world at risk. We help clients in the public and private sectors navigate urgent, complex challenges—from extreme weather and market volatility to financial insecurity and rising health costs—so they can meet their business, financial, and social objectives. Our solutions encompass insurance, financial services, healthcare, life sciences, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. For further information visit www.milliman.com.

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“The ongoing performance gap between personal and commercial lines remains, but that gap is closing." - Dale Porfilio, Chief Insurance Officer, @iiiorg