US Property & Casualty Outlook: soft market, or soft landing?
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US P&C premium growth and profitability are moderating as the market enters 2026, following an exceptionally strong 2025 underpinned by solid underwriting performance. Margins remain attractive, drawing incremental capacity into the sector and easing price momentum. As a result, we see growth and returns normalizing toward cost of capital over 2026-2027.
Market data through 3Q25 show premium growth decelerated to 4% from 9% a year earlier, while the industry delivered an 89% combined ratio in 3Q, the strongest quarterly result in decades. Looking ahead, we expect premium growth to slow to 3% in 2026 and 3.5% in 2027, with ROE declining to 12% in 2026 and 10% in 2027.
Figure 1: Quarterly direct premiums written (year-on-year)