Today's Headline
US property & casualty outlook: sunny skies, but pack an umbrella | Swiss Re
The US P&C industry recorded a 99% combined ratio in the first quarter of 2025, an impressive result given the California wildfires. It's also a signal of strong underlying profitability.
However, rising capacity and competition will begin to erode underlying results, and elevated catastrophe activity continued through the second quarter. Rate gains are easing across many commercial and personal lines where insurers assess pricing to be adequate and are targeting expanded market share in spite of elevated uncertainties. We see headwinds to premium growth building, which may be compounded if exposure growth slows. We still see growth slowing toward longer-term averages and forecast a 5.5% premium gain in 2025 and 4% in 2026. We see return on equity (ROE) at 10% in both years.
Key takeaways
- The 2025 outlook remains favorable on historically strong but slowing underlying underwriting results.
- We expect decelerating growth but profits to remain stable. That said, there is potential for loss-cost shocks.
- We forecast industry ROE of 10% in 2025 and 2026 as investment returns offset weaker underwriting profitability.
- We expect premium growth to slow to a still-strong 5.5% in 2025, and to 4% in 2026. Profitability
We forecast ROE at 10% this year and next,1 a slight decline from 11% in 2024 after elevated catastrophe activity in the first half of the year. The underwriting tailwinds that drove 2024 improvements – strong premium growth, easing inflation and low claims severity growth – are mostly past. We see premium growth easing this year amidst rising competition, especially in commercial property and personal lines. Potential tariffs could push up claims costs. Investment return gains have slowed as the gap between portfolio and market yields narrows.
Growth
We forecast direct premiums written (DPW) growth of 5.5% in 2025 and 4% growth in 2026. In 1Q25 premium growth dipped below 7% for the first time since 1Q21. Historically strong growth in the past four years was first driven by commercial line premiums recording double-digit gains in 2021-22, and then by personal lines in 2023-24. Today, growth rates are converging to the mid-single digits
Financial Results
Progressive profit more than doubles on strong personal insurance growth
Insurance spending remained resilient during the quarter, as businesses and individuals continued spending on policies to protect against risks in a tough macroeconomic environment, despite rising premiums. Insurance companies were also helped by a solid U.S. job growth.
The company had 36.1 million personal insurance policies in force, 16% higher than last year. Progressive Corp reported second-quarter profit that more than doubled on Wednesday, boosted by robust performance in its personal lines insurance business, sending its shares up 1.5%.
Insurance spending remained resilient during the quarter, as businesses and individuals continued spending on policies to protect against risks in a tough macroeconomic environment, despite rising premiums.
Insurance companies were also helped by a solid U.S. job growth. The company had 36.1 million personal insurance policies in force, 16% higher than last year.
Net premiums written rose 12% to $20.08 billion in the quarter and its combined ratio improved to 86.2% from 91.9% year-on-year. A ratio below 100% indicates the insurer earned more in premiums than it paid out in claims.
Net income of the insurer came in at $3.18 billion, or $5.40 per share, in the three months ended June 30, compared with $1.46 billion, or $2.48 per share, a year ago.
The Mayfield Village, Ohio-based company's shares have gained nearly 1% in 2025, as of last close, compared to a 6.2% rise in the benchmark S&P 500 index.
News
Report: EVs Have Likely Peaked
With demand failing to meet plentiful supply, used-EV values are declining.
Though many auto industry watchers are bracing for tanking electric-vehicle demand when federal EV tax credits expire in October, consumer appetite actually started to plateau last year and will likely fall from there, according to a new report.
Market share growth started to flatten out late last year, will surely fall after federal incentives end soon.
The turning point began even as buyers scooped up EVs during the holidays like hotcakes. Market share flattened at about 7% late last year, said online automotive search engine and research website iSeeCars.com, citing Cox Automotive figures.
It points out that with the up to $7,500 federal tax incentives about to expire, sales will only fall from there. Though EV demand has grown over time, the market analyst says prices for new EVs compared to gas-powered autos have limited that growth.
IGA asks feds to stop anti-competitive behavior by Safelite as State Farm glass admin | Repairer Driven News
The Independent Glass Association (IGA) has requested a temporary moratorium from the Federal Trade Commission (FTC) and Department of Justice (DOJ) to stop alleged anti-competitive behavior by Safelite Solutions as the new national glass claims administrator for State Farm.
Safelite Solutions took over the role from LYNX Services July 1. IGA claims that since the change, State Farm’s portal only displays limited shops, often Safelite-owned chains, and centralized numbers are using subtle steering, such as implying non-Safelite shops may charge out-of-pocket or lack warranties.
IGA previously filed letters with the FTC and DOJ voicing antitrust concerns in the spring. Supplemental letters were sent Monday, updating the federal agencies about Safelite’s practices.
The letters also say that consumers interacting with State Farm’s claim channels are routinely presented with “@safelite.com” communications and Safelite AutoGlass branding. It adds that without clarification, it makes consumers think they are communicating with a repair provider.
Judge allows Aon's patent lawsuit against ZestyAI to proceed
A federal judge has denied ZestyAI’s motion to dismiss a patent infringement case brought by Aon Re, allowing the lawsuit to move forward in the U.S. District Court for the District of Delaware.
“Recently, the Federal Circuit acknowledged the burgeoning field of artificial intelligence but held that patent owners may not claim the mere application of generic machine learning to new data environments. Aon’s patents do not offer a new twist on machine learning itself. But that is not fatal, because we agree with Aon that the patents recite the patent-eligible arrangement of two independently trained classifiers to analyze property characteristics and conditions. For the reasons that follow, we deny Zesty.AI’s motion to dismiss.”
“Zesty has not persuaded us that Aon’s claims pose such a risk. Claim 1 of the 029 patent requires a specific classifier arrangement that must analyze pixels from aerial images in a defined sequence to generate risk assessments. Zesty does not explain why this fails to leave room for alternative methods, and the record, albeit very limited at this stage, appears to suggest the opposite conclusion.”
Commentary/Opinion
Mercury Insurance Helps Dispel Common Auto Insurance Myths
There are a slew of common misconceptions surrounding auto insurance that permeate online and via word of mouth. In order to make informed decisions about auto insurance, it's important for consumers to dig a little deeper and refrain from taking these claims at face value.
"There's a lot of misinformation out there when it comes to auto insurance," said Justin Yoshizawa, Director Product Management State for Mercury Insurance. "We want to help consumers separate fact from fiction so they can make smart, informed decisions when shopping for coverage."
Myth #1: Color determines the price of auto insurance
It doesn't matter whether your car is "Arrest Me Red" or "Hide In Plain Sight White"— the color doesn't actually factor into your auto insurance costs. The price of your auto policy is based on many factors, such as a car's make, model, its overall safety record and its likelihood of theft. Insurers also take into account the age, driving record and sometimes the credit history of the driver.
Myth #2: It costs more to insure your car when you get older
In general, rates actually tend to go down as policyholders get older and have more experience behind the wheel, with those in their mid-50s typically paying the cheapest rates before rising again for seniors. However, older drivers may be eligible for special discounts. For example, those over 55 years of age can get a reduction in their auto insurance premium if they successfully complete an accident prevention course (available through local and state agencies as well as through the AAA and AARP). Retirees or those who aren't employed full time — and therefore, who are driving less — may also be eligible for a car insurance discount. SEE MORE MYTHS
InsurTech/M&A/Finance💰/Collaboration
Top insurtech funding rounds, June 2025 | Digital Insurance
There were about 50 funding events in the insurtech sector between June 1 and June 30, 2025, according to a review by Digital Insurance.
What follows is a selection of these, focusing on those in the insurtech and property & casualty sectors that are part of the venture-capital financing model. (Other funding events, such as private-equity infusions, are included in the overall count.)
A portion of the data was sourced from Crunchbase. Other information, including quotes from investing VCs, comes from company announcements. For our previous edition, which covered May, click here.
These updates will continue monthly.
These summaries were crafted using AI and then reviewed by the Digital Insurance editorial team.
Loro Raises $1.1M Seed Round to Revolutionize Specialty Insurance Distribution
Loro, the modern platform powering specialty insurance distribution, today announced the successful close of its $1.1 million seed funding round. The round was led by Markd, a prominent insurtech-focused investor, with participation from strategic angels across the insurance ecosystem.
Loro enables carriers, MGAs, and program managers to build and distribute insurance products at unprecedented speed, while maintaining full underwriting control and unlimited distribution flexibility. The platform is also the only insurtech solution that offers a completely free tier for up to $100,000 in gross written premium (GWP) annually, with no minimum commitment. This bold move removes the traditional financial barriers that prevent new entrants from launching and scaling insurance programs.
"This investment is a vote of confidence in our mission to unlock a better future for insurance builders," said Peter Tilbrook, CEO and Co-Founder of Loro. "We've grown to over 25 clients globally, connected more than 600 brokers, and powered meaningful premium volume, all without compromising on speed, affordability, or flexibility. This new capital allows us to double down on building the infrastructure the specialty market has been waiting for."
"Loro is doing something few others dare to do: empowering the people closest to risk to move faster, yet without them sacrificing any control," said Parker Beauchamp, of Markd. "The team understands the nuances of specialty insurance and is building with deep empathy for MGAs and carriers. We're proud to back them as they shape another chapter of insurance distribution."
AI in Insurance
New technology uses AI to help insurers detect fraudulent activity - Insurance News | InsuranceNewsNet
A new AI-powered solution has emerged to help insurers detect fraud by flagging unusual user activity directly on an insurance company’s website.
Glassbox is a digital experience intelligence platform that allows companies to monitor user experience on their respective websites. Its standout capability, the Glassbox Insights Assistant, is an agentic AI that helps financial companies process and act on engagement data.
Joe Crawford, director of professional services, explained that the AI quickly sifts through the large amount of website data, understands which behaviors are normal and flags abnormal activity such as unauthorized logins, suspicious changes to policies and more.
“We deal with a lot of large insurance companies and AI is really helping us to sift through the large amount of data that we have, that we’re using to monitor the user’s experience,” Crawford told InsuranceNewsNet.
He noted that on a typical website, hundreds of thousands of people visit or use those webpages every day. It is “impossible” for a team of trained staff to have to constantly monitor all of those sessions and identify the small details that make up fraudulent attempts, he said.
“There’s a lot of good people trying to do good things out there, but then there are some bad actors out there that are really trying to take advantage of certain situations. AI is helping us to distill all of that data and understand the anomalies in the data, to sift the wheat from the chaff or separate the sheep from the goats,” Crawford said.
People
AIG snaps up former Lloyd's chief as new president |
American International Group, Inc. (AIG) has announced the appointment of former Lloyd’s chief John Neal (pictured)as its incoming president, effective Dec. 1.
Neal will report directly to chairman and CEO Peter Zaffino and will be responsible for overseeing the company’s general insurance operations, which span North America commercial, international commercial, and global personal insurance.
Neal will also become part of the executive leadership team.
Zaffino commented that Neal’s industry experience and underwriting background will strengthen AIG’s leadership. “I have known John for more than 20 years, and he is widely recognized as one of the most accomplished insurance executives in the industry. His appointment adds significant depth, global underwriting experience, and talent to our leadership team,” he said. “I am confident that John will continue to enhance our culture of underwriting excellence. I look forward to working with him as we continue to drive profitable, sustainable growth and further strengthen our relationships with our valued clients and partners across the industry.”
Canada
Zurich Canada announces restructure | Insurance Business Canada
Company looks to streamline and brings departments together
Zurich Insurance Company Ltd’s Canadian branch has announced a significant reorganization of its business structure.
The company’s latest changes are intended to align its teams more closely with distinct customer segments, including national, middle market, SME, and retail, the company claims, as Zurich Canada enters a new phase of growth.
Recommended Events
Hit a Home Run with Connections That Count! ⚾
BRINGING YOU THE BEST OF SUMMER NETWORKING
Summer is in full swing, and so is the InsurTech America community!
We've got an exciting lineup of social gatherings designed for you to connect, unwind, and build valuable relationships with fellow professionals in the insurance technology space.
Forget stuffy conference rooms – these are about genuine connections in fun, relaxed settings.
- Florida 7/24
- Hartford 7/30
- Atlanta 8/7
- Hartford Pitch Night X111 10/2
About InsurTech Hartford
InsurTech Hartford was established in 2016 by passionate insurance professionals with the goal to develop a robust InsurTech ecosystem. No, InsurTech Hartford is part of InsurTech America, a network of communities working together to drive insurance innovation forward.
About InsurTech Hartford
InsurTech Hartford was established in 2016 by passionate insurance professionals with the goal to develop a robust InsurTech ecosystem. InsurTech Hartford is part of InsurTech America&, a network of communities working together to drive insurance innovation forward
2025 Global Insurance Forum - Presented by the IIS | Oct. 26-27 | Rüschlikon, Switzerland.
Overcome Uncertainty. Discover Opportunity at GIF 2025.
Join global insurance executives, innovators, and visionaries Oct. 26-27 at the Swiss Re Centre for Global Dialogue in Rüschlikon, Switzerland. Presented by the International Insurance Society, the Global Insurance Forum offers a bold examination of today's challenges while also honoring individuals and organizations who are driving insurance forward.
Against the backdrop of sweeping technological and geopolitical change, the program will explore the future of risk, AI and data, global trade, private equity, and climate resilience. Be part of the conversation shaping the future of insurance — and stand among the leaders defining it.