Swiss Re has foreseen a slowdown in US property and casualty (P&C) insurance premium growth for 2025, balanced by easing claims pressures.
The global reinsurer predicts premium growth to reach five per cent in 2025, down from prior expectations, with a further decline to four per cent in 2026.
The deceleration is attributed to increased competition among insurers, particularly in personal lines, as they chase market share.
Swiss Re expects commercial lines continue to experience slower growth, while workers' compensation premiums have shrunk.
Homeowners’ premiums, excluding catastrophe losses, are expected to follow a similar deceleration, with construction prices rising slightly in 2025 and 2026.
As of November 2024, 24 US weather events caused over US$1 billion in economic losses each, significantly impacting the P&C industry. Weather-related losses contributed nearly nine percentage points to the US P&C net loss ratio for the first nine months of 2024.
The industry’s combined ratio is expected to remain at 98.5 per cent in 2025 before deteriorating slightly to 99 per cent in 2026.
Favourable reserve development of US$9 billion in 2024 helped reduce loss ratios by over one percentage point despite higher-than-anticipated catastrophe losses.
Hurricanes Helene and Milton caused insured losses estimated at US$50 billion in Q3 and Q4 2024.
Globally, insured losses from natural catastrophes are on track to exceed US$135 billion in 2024, with the US accounting for two-thirds.
