Property & Casualty Forecast: Personal Auto to Improve, General Liability a Weak Spot  

• By: AnneMarie McPherson Spears
• July 21, 2025

The insurance industry’s net combined ratio is predicted to be 99.3 for 2025, according to a property & casualty forecast from Triple-I and Milliman. While that’s up 2.7 points from 2024 due to line-specific challenges, 2026 is expected to bring a return to broader profitability.

As the U.S. property & casualty insurance market exhibits mixed results in 2025, personal auto continues its run. The 2025 net combined ratio for personal auto is forecast at 96.0, according to a recent report from Triple-I and Milliman. While the forecast is 1 point higher than 2024’s results, personal auto is still on track to achieve profitability this year.

The positive forecast comes as personal auto premiums continue to rise this year, climbing 5.7% in the second quarter of 2025, according to a report from Novatae Risk Group. Overall, the second quarter brought increases for both personal and commercial lines premiums, at 4.6% and 2.8%, respectively.

Unfortunately, the homeowners segment was hit hard by losses from the Los Angeles wildfires in January. This led to the homeowners market’s worst quarterly performance since the second quarter of 2011.

General liability has been another sore spot, posting the second-worst first quarter in more than 15 years. The first quarter of 2025 was less than a 1-point improvement from the first quarter of 2024, pointing to continuing concerns.

“For general liability, the [net combined ratio] is expected to improve in 2026-2027 but remain unprofitable,” says Jason B. Kurtz, principal and consulting actuary at Milliman. “It is worrisome that the first quarter 2025 direct incurred loss ratio was only marginally improved relative to the first quarter of 2024, and that these two results are the highest first quarter loss ratios in more than 15 years. On a positive note, premium growth does appear to be picking up.”

Kurtz added that commercial auto is likely to remain unprofitable through 2027, despite double-digit net written premium growth predicted in 2025.

As the year continues, Triple-I and Milliman’s p-c forecast predicts that overall net written premiums will grow 6.8%, down 2.0 points from 2024 and the lowest since 2020. Personal lines premium growth is anticipated to outpace commercial lines by 1.5 percentage points, but the gap is likely to narrow by 2027.

“The U.S. economy and P/C industry have been resilient in the face of tariffs and trade uncertainty,” says Michel Léonard, chief economist and data scientist at Triple-I. “The insurance industry’s economic growth drivers continue to outperform overall U.S. [gross domestic product] growth.”

As the rest of 2025 unfolds, Léonard warns that concerns over economic contraction or recession may begin to emerge. The impact of tariffs on prices has impacted personal auto in particular. The price of used cars and trucks have begun to tick up, increasing 7.7% in the first half of 2025.

AnneMarie McPherson Spears is IA news editor.