AM Best is maintaining its stable outlook for the U.S. commercial lines market, citing the segment’s strong underwriting and overall operating performance, despite variability across individual lines of business.
U.S. commercial lines insurers overall reported favourable underwriting and operating results through the first three quarters of 2025, as evidenced by composite combined ratios remaining in the mid-90-per cent range.
With all this in mind, the rating agency expects that the majority of the segment’s carriers will maintain sound risk-adjusted capitalisation levels.
“The stable outlook also reflects the dynamics and respective stable outlooks within the major underlying commercial sub-segments, including commercial property, workers’ compensation, surety, medical professional liability, among others,” AM Best added.
Alan Murray, director, AM Best, commented, “The stable outlook on this commercial segment reflects our expectation that the U.S. commercial lines segment will remain profitable in aggregate and will be resilient in the face of near- and longer-term challenges.”
Carlos Wong-Fupuy, senior director, AM Best, said, “Commercial insurers are leveraging technology and innovative products, including artificial intelligence, to enhance underwriting and pricing decisions.
“At the same time, a more direct focus on loss control and claims management is resulting in lower claims frequency and severity.”
The rating agency also flagged several near-term concerns that could become problematic, including elevated casualty claims reflecting the multi-year effects of social inflation, as well as persistently high property claims costs.
AM Best further noted that heightened geopolitical risks and near-term policy uncertainty, particularly the effects of tariffs, pose additional headwinds by creating uncertainty around inflation and supply chains.
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