By Jeff Dunsavage, Senior Research Analyst, Triple-I
Florida Gov. Ron DeSantis announced last week that state regulators have secured nearly $1 billion in premium refunds for Progressive auto insurance policyholders in the state, due to cost savings achieved through litigation reform.
DeSantis, who signed sweeping tort reform legislation bills into law in 2022 and 2023, said the refunds are a direct result of declining litigation expenses in Florida’s auto insurance market.
“Florida was really considered a litigation hellhole by a lot of folks,” DeSantis said. “That contributed to consumers having to bear more costs with respect to auto insurance.”
He pledged Insurance Commissioner Mike Yaworksy is negotiating with other major auto carriers for similar reimbursements to their customers.
Mark Friedlander, Triple-I’s director of communications, told Spectrum News Florida that reduced lawsuit expenses has enabled auto insurers to lower average costs and, in some cases, return premium to customers.
“When you take that out of the equation — all of those abusive lawsuits — this brings down the expenses, and that in turn gets passed along to the consumer,” Friedlander said. “The consumer wins with legal system reform.”
By William Nibbelin, Senior Research Actuary, Triple-I
The U.S. property/casualty (P/C) insurance industry is on track for a second consecutive year of underwriting profitability in 2025, and is projected to grow faster than the broader U.S. economy, according to the latest Insurance Economics and Underwriting Projections: A Forward View report from Triple-I and Milliman. The report, which is based on data through the first half of 2025, highlights continued progress despite persistent geopolitical and natural catastrophe uncertainties.
Positive Economic Signals and Lingering Concerns
The industry’s economic outlook remains cautiously optimistic. According to Michel Léonard, Ph.D., CBE, chief economist and data scientist at Triple-I, the industry has benefited from stronger-than-expected underlying growth. He also noted that P/C replacement costs continue to rise more slowly than overall inflation.
However, Léonard also pointed to factors that make the outlook for 2026 especially important to watch.
“Ongoing risks, including tariffs, labor market softening and persistent inflation,” could pose challenges, he said. While the impact of tariffs has been less severe than initially anticipated, their long-term effect remains an open question.
Underwriting Performance: A Mixed Bag
Overall underwriting profitability for 2025 is expected to be a repeat of 2024, but to a lesser degree. The performance gap between personal lines and commercial lines is narrowing.
“Favorable second-quarter results for homeowners helped narrow the anticipated 2025 gap between personal and commercial lines performance created by the Los Angeles fires in the first quarter,” said Patrick Schmid, Ph.D., Triple-I’s chief insurance officer.
Schmid also noted that personal lines premium growth is expected to remain higher than commercial lines by one point in 2025. That difference is projected to disappear by 2027.
Personal Lines
Personal Auto: The personal auto sector continues to be a highlight, with its forecast 2025 Net Combined Ratio (NCR) on track for continued profitability. The forecast has also slightly improved from prior estimates.
Homeowners: Despite favorable results in the second quarter, the homeowners’ NCR forecast for 2025 is still expected to be unprofitable for the year.
Commercial Lines
General Liability: This continues to be a line of concern. According to Jason B. Kurtz, FCAS, MAAA, a principal and consulting actuary at Milliman, “We see underwriting losses continuing in 2025, with the 2025 net combined ratio for GL forecast at 107.1.” He also said that, while slight improvement is expected in 2026-2027, “we estimate GL combined ratios to remain above 100.” Kurtz added, “Direct incurred loss ratios through mid-2025 have not improved relative to 2024’s poor result. Forecasted net written premium growth of 8.0 percent is 4.8 points above 2024 as premiums respond to recent performance.”
Workers Compensation: In contrast to general liability, workers’ compensation remains the strongest-performing major line in the P/C industry. Preliminary 2025 results from NCCI show calendar year combined ratios in the range of 85–93 percent. Donna Glenn, Chief Actuary at NCCI, noted, “If this holds, it will represent 12 consecutive years of combined ratios under 100% for private carriers.” For more details on the preliminary Workers Comp 2025 results, see NCCI’s full analysis in 2025 in Sight, 2024 in Review: The Latest Results for Workers Compensation.
Delving Deeper: A Members-Only View
For members who want to dig deeper into the projections, the full Insurance Economics and Underwriting Projections: A Forward View report offers a more granular analysis, including:
A detailed look at personal auto and commercial auto results, breaking down the quarterly experience between auto liability and physical damage.
A forecast of net combined ratio and net written premium growth specific to farmowners insurance.
A comparison of commercial property sub-lines.
A breakdown of commercial multiple peril results, differentiating between property and liability performance.
The next quarterly report will be presented at a members-only webinar in January 2026.
International travel insurance is crucial for financial protection against unforeseen events like medical emergencies or lost baggage. Travelers must choose between single-trip and multi-trip policies, considering their travel frequency, budget, and trip types. Making an informed decision ensures adequate coverage and peace of mind for any international adventure, preventing potential financial losses.
By William Nibbelin, Senior Research Actuary, Triple-I
Motor vehicle tort cases in federal and state courts generated $42.8 billion in “excess value” from 2014 to 2023, according to new analysis by Triple-I.
“Excess value” may sound like a good thing, but it’s not. It represents an additional cost of motor vehicle civil litigation – above and beyond what it would have been if prior trends in court filings had continued. From 1995 to 2007, filings declined, and from 2007 to 2014 they were flat.
The report illustrates the impact of litigation inflation on insurance premiums for all drivers. It also underscores the challenges related to accurately quantifying and comparing state-by-state experience.
Lawsuits push premium up
As Triple-I has previously reported, litigation trends are a major force driving up auto insurance premiums. As claims costs rise – whether due to rising repair costs, litigation, or other factors – premiums must increase to ensure that insurers have enough policyholder surplus to pay future, higher claims.
Policyholder surplus is not a nice-to-have extra. It is the money state regulators require insurers to maintain so they will be able to keep their promises to pay policyholders. In addition, credit rating agencies expect insurers to keep even larger surpluses than the states mandate to enable the insurers to borrow at more favorable interest rates when needed.
Interestingly, motor vehicle tort settlement amounts appear to have decreased on average between 2014 and 2023. While actual settlement amounts are not reported, the “amount in controversy” – legalese for the amount demanded by the plaintiff – serves as a proxy for filings disposed as settlements. The average amount in controversy decreased from $748,000 in the first of the three decades under consideration to $674,000 in the third.
However, the increased volume of cases during the period drove the overall excess value to $984.6 million at the federal level alone.
State courts present a challenge
The report estimates that state courts handled approximately 5.0 million motor vehicle tort cases from 2014 to 2023, generating an excess value of $41.8 billion – dwarfing the federal court impact. This analysis, however, is challenged by the state-by-state variety of definitions and criteria for data collection.
“Because states maintain different definitions and criteria for data collection, most state civil case data is either unavailable or incomplete,” the report says.
The report concludes that its findings align with previous research by Triple-I and the Casualty Actuarial Society, which quantified increasing inflation on auto liability insurance at $118.9 billion for 2014-2023, representing both litigation and economic inflation.
“As we continue to analyze the evolving landscape of motor vehicle litigation, it’s clear that a deeper, data-driven understanding of both national and state trends is crucial,” said Patrick Schmid, Triple-I’s chief insurance officer. “Only with more transparent and comprehensive data can we craft effective solutions that benefit both policyholders and the broader insurance market. Future research should focus on bridging the gaps in state-level information and exploring the causal factors behind rising litigation and its impacts.”
A climate nonprofit plans to revive a key federal database tracking billion-dollar weather and climate disasters that the Trump Administration stopped updating in May, Bloomberg reported.
The database captures the financial toll of increasingly intense weather events and was used by insurers and others to understand, model, and predict weather perils across the United States. Dr. Adam B. Smith, the former NOAA climatologist who spearheaded the database for more than a decade, has been hired to manage it for the nonprofit, Climate Central.
NOAA in May announced it would stop tracking the cost of the country’s most expensive disasters, those which cause at least $1 billion in damage – a move that would leave insurers, researchers, and government policymakers with less reliable information to help understand the patterns of major disasters like hurricanes, drought or wildfires, and their economic consequences.
Climate Central plans to expand beyond the database’s original scope by tracking disasters as small as $100 million and calculating losses from individual wildfires, rather than simply reporting seasonal regional totals.
A record 28 billion-dollar disasters hit the United States in 2023, including a drought that caused $14.8 billion in damages. In 2024, 27 incidents of that scale occurred. Since 1980, an average of nine such events have struck in the United States annually.
This summer – amid deadly wildfires and floods – the Trump Administration has appeared to be rolling back some of its DOGE-driven NOAA funding cuts. NOAA recently announced that it would be hiring 450 meteorologists, hydrologists, and radar technicians for the National Weather Service (NWS), after having terminated over 550 such positions in the already-understaffed agency in the spring.
In addition, the administration’s announced termination of the Building Resilient Infrastructure and Communities (BRIC) program — run by the Federal Emergency Management Agency (FEMA) — has been held up by a court injunction while legislators debate its future. Congress established BRIC through the Disaster Recovery Reform Act of 2018 to ensure a stable funding source to support mitigation projects annually. The program has allocated more than $5 billion for investment in mitigation projects to alleviate human suffering and avoid economic losses from floods, wildfires, and other disasters.
Regarding the rescue of the NOAA dataset, Colorado State University researcher and Triple-I non-resident scholar Dr. Phil Klotzbach said, “The billion-dollar disaster dataset is important for those of us working to better understand the impacts of tropical cyclones. It uses a consistent methodology to estimate damage caused by natural disasters from 1980 to the present and was a critical input to our papers investigating the relationship between landfalling wind, pressure and damage. I’m very happy to hear that this dataset will continue!”
Improved loss ratios, strong premium growth, and lower retention rates characterized the U.S. auto insurance industry in 2024, according to LexisNexis® Risk Solutions’ 2025 U.S Auto Insurance Trends Report.
The report shows that, “while a number of insurers returned to profitability as the market softened,” the market was characterized by “record levels of policy shopping and switching, attorney representation, claims severity, and rising driving violations.”
Rate increases over the past two years helped U.S. insurers address profitability issues, the report said. Premium rate increases are beginning to ease, rising 10 percent in 2024, compared with a 15 percent hike in 2023, as market conditions soften. Insurer profitability is improving, with direct written premiums growing 13.6 percent, to $359 billion, and incurred loss ratios stabilizing, enabling some carriers to pursue growth strategies and file for rate decreases.
LexisNexis Risk Solutions also notes that tariffs may factor into how insurers consider rate in 2025. While the market wouldn’t expect the magnitude of activity seen between 2022 through 2024, tariffs, if they stick, could set off a ripple effect of moderate rate increases with implications across the industry.
Other trends identified in the report include:
Bodily injury claims severity jumped 9.2 percent, and property damage severity climbed 2.5 percent, year over year. In contrast, collision severity fell 2.5 percent for the same period.
All driving violations increased 17percent and driving violation rates across the United States surpassed 2019 levels.
Policy shopping reached an all-time high, with more than 45 percent of policies in force shopped at least once by year-end.
The report also noted that electric vehicle (EV) transitions are introducing new risks, as drivers moving from internal combustion engine vehicles to EVs experienced a 14 percet rise in claim frequency.
“Auto insurers continue to navigate a dynamic market,” said Jeff Batiste, senior vice president and general manager, U.S. auto and home insurance, LexisNexis Risk Solutions. “The combination of the market softening and a return to profitability presents a potential new chapter for the industry as insurers encounter a consumer base that is more willing than ever to shop for deals.”
Record levels of auto policy switching translated to 2024’s new policy growth rate of 17.7 percent year over year. It also added momentum to the ongoing customer retention decline across the industry.
Since 2021, retention has decreased five percentage points, to 78 percent, resulting in a 22 percent increase in policy churn, the report says.
“Historically, dropping even one percentage point is significant,” it says. “However, against a backdrop of heightened levels of shopping and switching activity, insurers may want to focus on their retention strategies, especially when long-tenured customers are hitting the market.”
Parents are increasingly open to using technology to keep their teen drivers safe on the road, a recent survey from Nationwide finds.
The survey found 4 out of 5 parents would enroll their teens in telematics programs that reward safe driving. This enthusiasm for tech-based solutions comes despite mixed parental assessments of their teens’ driving abilities: While 42 percent rate their teen’s driving as “good” or “excellent”, similar percentages express concerns about distracted driving and reckless behavior.
“Parents want to feel confident that their teens are making smart choices behind the wheel,” says Casey Kempton, Nationwide president of P&C personal lines. “These tools help make that possible—not just by monitoring behavior, but by encouraging better habits through positive reinforcement.”
Despite recognizing the value of safety technology, adoption remains limited. While 96 percent of parents said they believe dashcams provide valuable evidence after accidents, only 26 percent of teen drivers actually have them installed.
The survey reveals a broader trend in which consumers are drawn to telematics and monitoring technologies, though motivations vary. While parents prioritize safety benefits, many consumers are equally interested in the insurance premium discounts these programs can provide.
“This isn’t just about technology,” Kempton says. “It’s about creating a culture of accountability and shared responsibility on the road.”
As comfort with AI-enabled monitoring grows, it appears that families are embracing a future in which technology supports — but does not replace — good judgment.
With global tourism rebounding, travel insurance via the ABCD App offers comprehensive protection against flight delays, medical emergencies, and unexpected costs. As international travel surges and disruptions increase, this insurance provides financial security, covering expenses like re-bookings and medical evacuations. It’s a smart investment, safeguarding travellers from significant financial risks during their journeys.
Devastating flooding in central Texas over the July 4, 2025, weekend highlighted several aspects of the state’s risk profile that also are relevant to the rest of the country, according to the latest Triple-I Issues Brief. One is the rising incidence of severe inland flooding related to tropical storms.
Tropical Storm Barry made landfall in Mexico on June 29 and weakened quickly, but its remnant moisture drifted northward into Texas, according to Dr. Phil Klotzbach, a research scientist in the Department of Atmospheric Science at Colorado State University and a Triple-I non-resident scholar.
“A slow-moving low-pressure area developed and helped bring up the moisture-rich air rom Barry and concentrated it over the Hill Country of central Texas,” Klotzbach said. “The soil was also extremely hard from prior drought conditions, which exacerbated the flash flooding that occurred.”
Such flooding far from landfall has become more frequent and severe in recent years. In Texas – as in much of the United States, particularly far from the coasts – few homeowners have flood insurance. Many believe flood damage is covered by their homeowners’ or renters’ insurance. Others believe the coverage is not worth buying if their mortgage lender doesn’t require it. In Kerr County, where much of the July 4 flooding took place, flood insurance take-up rates through the National Flood Insurance Program (NFIP) were 2.5 percent.
Convective storms, fires, and freezes
But tropical storms aren’t always the impetus for flooding. In July 2023, a series of intense thunderstorms resulted in heavy rainfall, deadly flash floods, and severe river flooding in eastern Kentucky and central Appalachia. The conditions that lead to such severe convective storms also are prevalent in Texas.
Severe convective storms are a growing source of losses for property/casualty insurers. According to Gallagher Re, severe convective storm events in 2023 and 2024 “have cost global insurers a remarkable US$143 billion, of which US$120 billion occurred in the U.S. alone.”
Given its aridity and winds, it should be no surprise that Texas is highly subject to wildfire – but the state also has been increasingly prone to severe winter storms and debilitating freezes. On Valentine’s Day 2021, snow fell across most of Texas, accumulating as temperatures stayed below freezing and precipitation continued through the night. A catastrophic failure of the state’s independent electric grid exacerbated these conditions as snow and ice shut down roads and many homes suffered pipe bursts and multiple days without power.
Texas’s 2021 experience illustrates how grid instability can act as a “risk multiplier” for natural disasters. The entire U.S. electric power grid is increasingly vulnerable as the infrastructure ages and proliferating AI data centers increase demand.
Need for data and collaboration
The severe damage and loss of life from the July 4 flooding have naturally raised the question of whether the Trump Administration’s reductions in National Weather Service staffing contributed to the high human cost of this event. While it is hard to say with certainty, these cuts have affected how NWS works – for example, in its use of weather balloons to monitor weather. As early as April, staffing data gathered by NWS indicated that field offices were “critically understaffed”.
In June, panelists at Triple-I’s Joint Industry Forum expressed concern about the impact of the federal cuts on weather monitoring and modeling, as well as programs to help communities adequately prepare for and recover from disasters. Triple-I has published extensively on the need for insurers to shift from exclusively focusing on repairing and replacing property to predicting events and preventing damage.
Collective action at all levels – individual, commercial, and government – is needed to mitigate risks, build resilience, and reduce fraud and legal system abuse. Triple-I and its members are committed to fostering such action and regularly provide data and analysis to inform the necessary conversations.
Recent developments in the atmosphere over the Caribbean Sea have led researchers at Colorado State University (CSU) to make slight improvements to their hurricane forecast for the 2025 Atlantic-basin season, in an update published Wednesday.
Triple-I non-resident scholar Phil Klotzbach, Ph.D., a senior research scientist in the Department of Atmospheric Science at CSU, and the CSU TC-RAMS research team are now predicting 16 total named storms through the end of the year, a small drop from their original forecast of 17.
“The primary reason for the slight decrease in our outlook is both observed and predicted high levels of Caribbean wind shear,” Klotzbach said. “High levels of Caribbean shear in June and July are typically associated with less active hurricane seasons.”
Klotzbach warned, however, that peak hurricane season – which typically occurs from mid-August through late October – could still be very active, despite current atmospheric conditions.
“The subtropical eastern Atlantic and portions of the tropical Atlantic are warmer than normal,” he said. “The current Atlantic sea surface temperature pattern is fairly similar to what we typically observe in July prior to active Atlantic hurricane seasons.”
