US Finance and Insurance Sector NAICS 52

Jan 22, 2026 - Affordability Pressures Rising for P&C Insurers

• US home and auto insurers are facing mounting political pressure as profits surge largely because of steep premium increases that have strained household budgets. After suffering post-pandemic losses, insurers pushed through aggressive rate hikes - especially in homeowners insurance - driving the property-and-casualty industry to its strongest underwriting profits in nearly two decades. Home-insurance rates rose an average 6% last year, according to S&P Global (more than double inflation) with much larger increases in high-risk states such as Colorado and California, while auto rates have only recently stabilized in some markets. The disconnect between higher premiums and near-record earnings has fueled calls for profit caps, including a proposal from New York Governor Kathy Hochul. Insurers argue such caps would reduce competition and force market exits, saying profits reflect delayed recovery and regulatory lag, but critics say affordability concerns are being sidelined as earnings remain elevated.
• The Trump administration has proposed capping credit card interest rates at 10% for one year, beginning January 20, 2026, aiming to reduce the burden of high interest for American consumers. Trump argues current rates - often above 20% - are unfairly high and need to be limited. Financial industry leaders and economists counter that such a cap could restrict access to credit, particularly for borrowers with lower credit scores, because banks would struggle to make profitable loans under the limit. Major banks like JPMorgan and Citi have warned the cap could hurt consumers and the broader economy. The plan has drawn mixed political reactions: some praise its intent to help borrowers, while others - including lawmakers - doubt its legal feasibility without congressional approval. Implementation details remain unclear, and experts caution about unintended consequences, such as reduced credit availability and shifts to higher-cost lending alternatives.

• US employer-sponsored health insurance premiums have risen about three times faster than wages over the past 25 years, climbing roughly 342% from 1999 to 2024 compared with a 119% increase in wages and 64% inflation. Research from Rice University attributes much of this growth to rising hospital prices, which have been driven in part by consolidation that gives large health systems more power to raise rates. Workers often don’t recognize how sharply premiums have climbed because costs are deducted automatically from their paychecks, but the financial burden has grown steadily for both employees and employers. Despite these higher premiums, the study finds little evidence that care quality has improved, underscoring broader concerns about the affordability of medical insurance and the underlying cost pressures within the US healthcare system.
• US household debt reached a record high of $18.5 trillion in the third quarter of 2025, increasing about $197 billion from the previous quarter. Student‑loan debt rose to $1.65 trillion, with roughly 10 % at least 90 days delinquent, signaling ongoing repayment challenges for many borrowers. Credit‑card balances climbed to $1.23 trillion, up $24 billion in just the quarter and nearly 6 % higher than a year earlier, reflecting growing consumer spending and higher borrowing costs. Auto loans and other forms of consumer credit also contributed to the overall increase in household debt. Despite the record levels, the Federal Reserve Bank of New York notes that most household balance sheets remain relatively strong, though younger Americans and those carrying higher debt loads are showing signs of financial stress. Economists caution that continued interest-rate hikes and rising debt could pose challenges for households in the months ahead.