The US property and casualty (P&C) insurance industry has outlined a range of measures aimed at improving insurance affordability and availability, as rising premiums continue to place pressure on household budgets.
According to the American Property Casualty Insurance Association (APCIA), insurers are responding to a combination of structural challenges, including inflation, increasing catastrophe losses, development in high-risk areas, and litigation trends. These factors have driven up claims costs and contributed to higher premiums across key lines such as homeowners’ and auto insurance.
Over the past five years, insured losses from natural catastrophes have reached a record $522 billion, placing strain on insurer balance sheets and prompting pricing adjustments to restore financial stability.
Despite these pressures, the industry noted early signs of stabilization. Rate increases have slowed in 2025, with some markets experiencing reductions, particularly in personal auto insurance. Improvements in reinsurance conditions and stronger capital positions have also helped ease cost pressures.
However, affordability challenges remain, especially in homeowners’ insurance, where reconstruction costs continue to rise. Construction labor has increased by more than 36%, while building material costs have climbed over 42% in recent years.
To address these issues, insurers are advocating for coordinated efforts across industry and government to reduce risk and improve market efficiency.
Key developments and proposed actions include:
The industry emphasized that no single solution will resolve affordability concerns. Instead, a combination of regulatory reform, risk reduction, and stronger collaboration between public and private stakeholders will be necessary to create a more sustainable insurance market.
