Insurance sector poised for strategic growth

A Swiss Re study paints stable future for the insurance sector across the globe:

- Mohan

Global reinsurance major Swiss Re, in a recent study titled 'Growth in the shadow of (geo)politics - Global economic and insurance market outlook 2025-26', maintains that the primary non-life insurance industry is improving its profitability and economic sustainability, arguing that underwriting results benefited from easing inflation and higher premium rates in 2024 and this may stay strong in 2025 and 2026.

“Coupled with improving investment results, this should support profitability. We forecast industry ROE at 10% in 2025 and 2026 in the 6 largest non-life insurance markets, which would exceed cost of capital. A more resilient industry is better positioned to reduce protection gaps, particularly when the capital base is strengthened, states the study adding, however, social inflation is not slowing in the US and rising costs of legal awards are also emerging in markets such as the UK, Australia and Mexico, impacting casualty insurers.

NON-LIFE PREMIUM GROWTH

Swiss Re expects decade-high 4.3% global non-life premium growth this year following the repricing of risk in response to elevated claims. Premium rates are now moderating, it says, maintaining that softer global premium growth of 2.3% annually in real terms over 2025-26, below the 3.1% average of the last five years.

LIFE PREMIUM TOO

The study says the total global life insurance premiums should reach US$4.8 trillion by 2035, up from US$3.1 trillion in 2024, driven by higher interest rates. US individual annuity sales should reach a new record of over US$400 billion this year and as monetary policy loosens, fixed rate annuity sales growth could slow and the focus shift to indexed annuities.

PRIMARY INSURANCE