With premium growth slowing to around 3% or 4%, and hurricane activity likely returning to normal levels, a
nalysts at Fitch Ratings foresee 2026 underwriting results for property/casualty insurers lining up with results for 2024.
Tana Marcom and Chris Grimes, both senior directors at the rating agency, offered the forecasts during
a North American Property/Casualty Credit Outlook webinar for 2026 yesterday, also noting that lower levels of favorable prior-year loss development factored into their projections.
Marcom noted that the U.S. P/C sector has reported “historically strong” results so far, and Fitch Ratings ex
ects the full-year 2025 combined ratio to land at around 94—”the best result in over 15 years.” The 94 combined ratio is also r
oughly 3 points lower than 2024’s overall industry combined ratio by Fitch’s calculations.
Besides the lack of landfalling hurricanes, $18 billion of favorable loss reserve development was reported through
the third quarter of this year, a figure that Marcom said was nearly double the level reported in 2024.
“The sector enters 2026 on solid footing with underwriting profitability expected to persist, although pro
fits will be slightly lower than 2025,” she said going on to indicate Fitch
’s forecast that the overall combined ratio will return to the 2024 level, climbing back to the 96-97 range next year.
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Breaking the results and forecasts apart for personal and commercial lines, Grimes and Marcom said that both sectors will likely report combined rat
ios of about 94 for 2025. For commercial lines, the result marks the fifth consecutive year of underwriting profitability, Grimes reported.
“We do expect underwriting profits to narrow modestly in 2026 with a combined ratio between 96 and 97” for commercial lines next year, he said.
Giving some highlights of the personal lines story, Marcom said
that a 94 combined ratio through nine months was 6 points lower than 2024, and that an 84 personal lines combined rat
io recorded for third-quarter 2025 was 15 points below last year’s personal lines combined ratio in the same quarter.
Related: Best Quarter in a Quarter Century: S&P GMI U.S. P/C Q3 Analysis
Strong private passenger auto insurance results blended with lower catastrophe losses to produce the favorab
le comparisons, she said. In particular, she highlighted 30 consec
utive quarters of double-digit rate increases for private passenger auto i
nsurance that fueled tremendous improvement in bottom-line results over the past two years.
Looking ahead, she said that while loss severity has gone up—”and could creep up more due to tariffs,” private
passenger auto loss frequency trends have benefited from improved safety features in cars.
As for homeowners, in spite of the absence of hurricane losses, the California wildfires added $40 billion to inc
urred losses and severe convective storms added another $50 billion.
“Despite this, ample property/ casualty reinsurance capacity is making it a buyers’ market, and primary insurers will benefit from softening rates there
in 2026,” she said, l
ooking ahead to next year. In addition, even though hurricane losses are likely to return next year, rate hikes
and underwriting actions should continue to positively impact profitability for homeowners insurers in 2026, she said.
Slower Growth and M&A
Asked to home in on premium growth next year, Marcom shared Fitch’s 3-4% expectation across all lines, noting that net written premium growth though nine m
onths in 2025 was just about 5%. That’s down from 9% and 10% for the same period in 2024 and 2023.
“That’s reflective of the lower private passenger auto rates and continued softening, particularly in the property
line of business,” she said, explaining the downward direction of the reported and expected growth rates.
During her earlier commentary on personal auto insurance, she noted that in light of the significantly improved profitability in the line, “we are now seeing
carriers pivot towards improving their retention and growing their new business with increased advertising spending and more modest rate increases in the low-single digit range.”
“Overall, we believe that competition remains rational and disciplined,” she added.