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For immediate release
New York Press Office, Loretta Worters 917-923-8245, lorettaw@iii.org

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NEW YORK, April 11, 2024—The��economic drivers of the U.S. property/casualty (P/C) insurance industry��are now growing faster than the nation’s Gross Domestic Product (GDP) and are expected to gain further momentum in the event of Federal Reserve monetary rate cuts, according to the �������� Information Institute’s (Triple-I) latest �������� Economics Outlook.

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“We’ve been forecasting that P/C underwriting growth would catch up on overall GDP and it has,” said��Michel Léonard,��Ph.D., CBE,��chief economist��and data scientist, Triple-I, in��the organization’s April 2024 Outlook. “Triple-I forecasts P&C underlying growth to increase to 3.4% in 2024, 1.2% above the Fed’s GDP forecast of 2.2%. It will likely take at least another year for this economic rising tide to lift the P/C industry’s overall growth and performance.”

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“Triple-I expects P&C underlying growth to continue outperforming overall GDP growth into 2025 and 2026.” Léonard said. Using the Fed’s GDP forecast as a basis for comparison, underlying insurance growth is expected to outperform overall U.S. growth by an average of 2.0% over the next three years, the report explains.

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“Different economic stress scenarios may reduce or widen the spread between P&C underlying growth and overall GDP growth, or even reverse the overall trend of P&C underlying growth outperforming overall GDP growth,” said Léonard. “The top two risks to underlying insurance growth and overall GDP growth is the Fed slowing or reversing course on monetary easing and renewed geopolitical risk including global supply chain disruptions.”��

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The Triple-I has been, and remains, more optimistic about growth than the Fed because its models put less emphasis than the Fed’s on the negative impact of each additional interest rate increase on GDP growth and the unemployment rate, the report noted. For 2024, Triple-I’s forecast for overall GDP growth is 2.6%, compared to the Fed’s 2.2%.

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Léonard said that a decision by the Fed to cut interest rates this year, “would provide further tailwind to key insurance underwriting growth such as housing and auto sales.”

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OTHER RESOURCES

�������� Economics for Property/Casualty

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