Our Insurance industry report will look under the bonnet of the $975bn-plus direct written premium U.S. P&C market. We’ll highlight the issues to watch, reveal the top players, share the industry statistics you need to know, and examine the trends shaping the sector. Our report will showcase Insurance Insider US’ expert coverage and in‑depth analysis of what’s happening now and what’s in the pipeline. Read on for factors driving the future of insurance.
The US P&C insurance market is enjoying a period of relative stability, with underwriting profit generally holding up despite heavy catastrophe losses. The picture is, of course, mixed by company and by line. What’s more, shadows on the horizon include geopolitical and economic uncertainty, social inflation, casualty reserving, and climate change.
Effective horizon scanning has never been more important as emerging risks proliferate and a period of slow global economic growth segues into economic and financial volatility. Here are some issues to watch that will inform insurers’ strategy and shine a light on the question, how much do insurance companies make?
Proposed legislation across the US to tamp down on litigation finance may just mitigate the damage to insurers’ liability loss ratios from ever‑increasing jury awards.
However, reform will take time and elevated compensation claims remain a pressing concern for the industry, with executives including Chubb CEO Evan Greenberg regularly speaking out about the issue. Swiss Re recently put the average annual social inflation rate at 5.4% between 2017 and 2022, compared with economic inflation at 3.7%.
Social inflation has also created a casualty claims handling problem for the industry, compounded by years of neglect and underinvestment. Subscribers to Insurance Insider US can click here for our full report.
Despite some notable reserve‑strengthening actions, the industry in general is still struggling to grasp the reserving and loss‑cost issue. Workers’ compensation reserve releases in recent years have masked levels adverse development but this favorable development is now dwindling. In a deep‑dive report, Insurance Insider US looked at commercial reserves, including a comparison of initial commercial loss picks with ultimate losses. We found more warning signals flashing red across the industry.
2025 looks set to be another year of elevated natural catastrophe losses, with Colorado State University predicting an above‑normal North Atlantic hurricane season. Munich Re calculated that 2024 insured natural catastrophe losses rose to $140bn, the third‑highest level on record, led by Hurricanes Helene and Milton. At the same time, temperatures rose to all‑time highs. Rate growth and, for reinsurers, higher retentions are helping the industry mitigate the risk. So too are innovations within the Insurtech market. AI and machine learning tools are turbocharging modeling by using an ever wider set of higher resolution data sources, all made possible by a step change in the computing power at our disposal. However, the exact location of a storm’s landfall, and therefore the extent of property damage, remains extremely difficult to predict until shortly before it strikes.
The California wildfires, which are predicted to generate an insured loss of around $40bn, are a stark example of how so‑called secondary perils are causing plus‑size pain. The loss is complex and difficult to discern by market share analysis, given an uneven distribution of high‑net‑worth exposure. Chubb, for example, estimated $1.5bn of losses despite not being in the Top 10 among homeowners’ insurers in the state. What’s more, uncertainty about the contents of the homes destroyed mean that what looked like a $5mn loss could quickly become far higher. The fires compounded an insurance capacity crisis in California, which Insurance Commissioner Ricardo Lara is trying to mitigate with his Sustainable Insurance Strategy.
The spectre of tariffs has challenged consensus expectations for economic growth, inflation, and interest rates. The uncertainty is just the latest worry in a so‑called geopolitical “permacrisis.” For insurers, geopolitical events, such as supply‑chain disruption because of politics, pandemic or war, impact multiple lines of business. Slowing economies also crimp demand for certain covers, while elevated interest rates mean higher financing costs for insurers and mark‑to‑market losses in bond portfolios. Our initial analysis suggests the impact of any tariffs on insurers could be manageable. Insurance Insider US will continue to bring you the latest expert insight on this fast‑changing situation, so subscribe today for full access.
P&C carriers are being torn apart on ESG. Climate change, and the associated transition risk, is one of the insurance industry’s biggest worries. Many customers, employees, and investors also want to see action on climate and other sustainability and governance‑related issues. However, the anti‑ESG movement in the US and early actions by President Trump, such as his curtailment of federal funding for diversity, equity, and inclusion initiatives, represent a change in the mood music. The SEC appears to have halted mandatory climate risk reporting, though recently it unexpectedly refused to exclude shareholder proposals at Chubb and at Travelers from climate activists.
In aggregate, recent figures from the Council of Insurance Agents and Brokers and from Willis Towers Watson show commercial lines rate growth is gently moderating, with significant differences between lines. Our qualitative analysis of recent C‑suite commentary points to a continued loss of momentum within commercial property. By contrast, social inflation is supporting casualty rates.
It remains too early to assess the primary market impact of the California wildfires, though reinsurers expect these to support property rates at upcoming renewals. In casualty, WR Berkley CEO Rob Berkley recently noted that casualty reinsurance rates remained concerning, despite growth in primary casualty rates. In personal lines, homeowners’ and auto policyholders face further rate rises. Insurers’ remedial rate action to protect loss ratios recently informed an AM Best outlook upgrade for personal lines to stable from negative, driven by an improving picture for personal auto.
In the P&C insurance sector size isn’t everything, but it matters. Our list of the biggest insurance companies, ranked by premiums, shows State Farm leading the way with $109bn direct premiums written (DPW) in 2024, a rise of 16% on a year earlier, followed by Progressive, at $75.9bn ($62.7bn) and Berkshire Hathaway at $63.3bn ($58.7bn).
This year, Switzerland‑based Zurich burst into the Top Ten in our list of insurance companies, with $18.6bn in direct written premiums. It displaced Nationwide, which had $17.7bn of DPW. Click here for the full rankings.
Of course, the best commercial insurance companies aren’t necessarily the biggest. Recent performance rankings by S&P Global Market Intelligence put Kinsale as the No. 1 US P&C insurer for the second consecutive year, as measured by growth in premiums, assets and policyholders’ surplus. The US subsidiaries of Arch Capital and FM Global ranked second and third, followed by Aspen and Assurant. Berkshire Hathaway, which came in at No. 10 for S&P, was the only carrier present in both league tables.
Insurance Insider US is a trusted source of timely research and data. Through proprietary analysis and by crunching insurance industry statistics, we join the dots to guide your strategic decisions. At company and industry level, we shine a light on the question “how much do insurance companies make” and the factors behind future profitability with regularly updated earnings intelligence. Read on for highlights of select deep dives from P&C experts for P&C experts.
Our analysis of statutory data for 2024 shows personal auto and homeowners drove the industry to an overall underwriting profit. As we entered 2025, personal lines had the lowest median combined ratio of 89.2%, a dramatic turnaround from a year earlier. We found that commercial insurance pricing has exceeded loss costs in most lines of business over the past five years. However, liability, product liability and medical malpractice are trouble spots, and recent Insurance Insider US analysis shows underwriting profit for casualty‑exposed insurers is weakening.
Looking ahead, the Swiss Re Institute’s January report on the US P&C market predicted an unchanged combined ratio of 98.5% and return on equity stabilising at 10% in 2025. It forecast US P&C DPW growth of 5%, around half the 2024 rate.
With persistent worries about casualty reserving, our analysis of statutory Schedule P data shows how the industry is balancing reserve development across lines and accident years. Net favourable development improved to $2.6bn in 2024, from $1.5bn. Our analysis reinforced the view that carriers are avoiding necessary reserve strengthening. Full report available by clicking here.
President Trump’s initial tariffs regime unsettled financial markets and raised questions about whether P&C stocks can continue to outperform the S&P 500. At the start of the year, we had predicted outperformance was unlikely, after 29 of 44 P&C stocks beat the S&P’s 23.3% in 2024. Our “Liberation Day” analysis showed sector resilience, with demand inelasticity as a key strength. Click here for further analysis. Our regularly updated earnings work provides further context.
Workers’ comp reserve releases have flattered overall reserve development and delayed necessary strengthening. Our research into this line points to weakening reserve releases. Workers’ comp premiums total $48bn—less than 6% of US P&C premiums—and wage and medical inflation are outpacing broader inflation.
The E&S market has grown sharply in recent years. Our 2024 data shows more than $130bn direct premiums written, though growth and outperformance are slowing. We analysed the market by state and carrier.
Brokers have delivered strong performance, defying predictions of slowing growth. Organic growth has decelerated, with the Big Four reporting 5%–7% in Q4. We expect M&A activity—particularly in the US middle market—and efficiency drives.
Reinsurers, who led the sector out of the downturn, continue to show strong profitability. Gallagher Re predicts P&C returns on equity of ~18–19% for 2025. California wildfires are expected to influence Florida renewals. Our Florida renewals preview explores the dynamics.
Insurers are taking various approaches to address the challenges and seize the opportunities of the evolving risk landscape. Here are five trends to watch.
Insurers continue modernising legacy systems and adopting InsurTech to generate efficiencies and improve decision‑making. AI is increasingly informing pricing, risk selection, fraud detection, claims payments and reserving. Carriers are in the early stages of harnessing gen AI but it looks set to be transformative. Click here for an on‑demand webinar on how carriers are using gen AI.
Tech capability, access to new markets and operational efficiencies drive M&A. 2024 saw low confidence and geopolitical uncertainty, slowing deal flow. Clyde & Co. found global insurance M&A fell to a 15‑year low of 204 deals. US activity was driven by a few large transactions. Clyde & Co. expects an acceleration this year.
Our analysis also shows an uptick in insurer IPO and deal activity and continued broker M&A. Our M&A Deal Tracker aggregates the data you need.
Telematics and smart‑home tech are enabling more personalised insurance in personal lines. Usage‑based insurance is well‑established in US auto, supported by GPS and behavioural data. Gen AI is enhancing personalisation across the customer journey, including campaigns and communications.
IoT in commercial and industrial environments offers real‑time risk management and potential dynamic pricing. Devices collect large volumes of operational data and can prevent incidents such as machinery failure or fire. Integration into insurer workflows is still emerging but expected to grow.
Embedded insurance is expanding beyond travel and appliances. It poses a disintermediation risk for insurers without the tech capability to integrate at point of sale, but a significant opportunity for those who can. Expected growth includes auto (with EVs and autonomy) and homeowners (already common via Zillow/Redfin). Regulatory scrutiny on pricing and transparency is expected.
Last updated: Apr 2025