Swiss Re Institute Highlights Global Insurance Trends Amid Economic and Geopolitical Shifts

Global insurance premiums are forecast to grow at a moderate pace of 2.6 percent annually in 2025 and 2026, according to Swiss Re Institute's latest sigma report, Growth in the Shadow of (Geo-)Politics. This growth is supported by sustained elevated interest rates, particularly in the United States, which continue to enhance insurer profitability.

Non-Life Insurance: Sustaining Profitability Amid Slower Growth

After a decade-high premium growth rate of 4.3 percent in 2024, global non-life insurance premiums are expected to decelerate, growing at 2.3 percent annually in real terms during 2025 and 2026, below the 5-year average of 3.1 percent. The slowdown reflects markets adjusting to elevated claims and repriced risks. Despite this, non-life insurers are expected to maintain strong financial performance.

Swiss Re Institute projects return on equity in the six largest non-life insurance markets to average 10 percent in 2025 and 2026, exceeding the cost of capital. This profitability is driven by improved investment results in the current high-interest-rate environment.

Regional Trends in Non-Life Insurance

• North America: a moderate annual growth rate of 1.9 percent is forecast, supported by strong consumer fundamentals and resilient economic activity.
• Europe: non-life premium growth is anticipated at 1.7 percent annually, reflecting challenges from trade uncertainties and slower economic recovery.
• Emerging markets: annual growth of 4.1 percent underscores the strength of emerging markets, driven by rising insurance penetration and urbanization.

Diverging Economic Paths: United States, Europe, and China

Swiss Re underscores the impact of geopolitical factors and regional economic dynamics in driving distinct growth patterns across the United States, Europe, and China.

• United States: The 2024 US election outcome is expected to heighten divergences in global growth, inflation, and central bank interest rate strategies over the next 2 years. US growth exceptionalism is projected to continue, even as sequential growth rates moderate. Gross domestic product (GDP) growth is forecast at 2.2 percent in 2025 and 2.1 percent in 2026, driven by strong consumer fundamentals, including record-high net wealth (up $50 trillion from 2019 levels) and greater savings than previously accounted for.
• Europe: European economies face disproportionate risks from global trade tensions and geopolitical uncertainty. The Euro-area is expected to underperform relative to the United States, with GDP growth rising modestly from 0.9 percent in 2025 to 1.1 percent in 2026. Risks remain skewed to the downside as trade-related pressures persist.
• China: China's economic growth is expected to slow to 4.6 percent in 2025 and 4.1 percent in 2026, reflecting structural challenges. Recent fiscal stimulus and monetary easing measures may bolster short-term sentiment but are unlikely to resolve longer-term issues.

Economic and Industry Outlook

Swiss Re forecasts global economic growth of 2.8 percent in 2025 and 2.7 percent in 2026. However, significant regional disparities and heightened geopolitical tensions could lead to adverse macroeconomic scenarios.

Jérôme Jean Haegeli, Swiss Re's group chief economist, commented, "We see higher inflation risks and chances of fewer interest rate cuts than previously assumed, particularly in the [United States] given the election outcome and the continued strong economy. Still elevated interest rates could further boost primary insurance markets, especially in life insurance, but a more fragile overall economic environment and volatile geopolitical backdrop raise risks of adverse macro scenarios. Early and proactive scenario monitoring will be critical for the insurance industry."

Download the Full Report

For a detailed analysis, download Swiss Re Institute's sigma report Growth in the Shadow of (Geo-) Politics here.