Global reinsurer Swiss Re has forecast robust growth for the insurance industry in the coming years, highlighting an improvement in profitability and economic sustainability, despite ongoing geopolitical tensions and emerging risks. In its latest report, “Growth in the Shadow of (Geo)Politics – Global Economic and Insurance Market Outlook 2025-26,” Swiss Re outlines the sector’s projected trajectory, emphasizing factors such as higher premium rates and easing inflation as key drivers of growth.
The study suggests that the primary non-life insurance industry is positioned for continued profitability, with underwriting results benefiting from a moderation in inflation and stronger premium rates throughout 2024. The company projects a return on equity (ROE) of 10% for the six largest non-life insurance markets in 2025 and 2026, which is expected to exceed the cost of capital. Swiss Re notes that a more resilient industry, underpinned by a stronger capital base, will be better equipped to address protection gaps.
However, the study also cautions that social inflation in the U.S. and rising legal costs in markets such as the UK, Australia, and Mexico continue to challenge casualty insurers.
Non-Life Insurance Premium Growth to Reach Decade-High Levels
Swiss Re forecasts a 4.3% growth in global non-life premiums in 2024, driven by the repricing of risk in response to elevated claims. This marks the highest growth rate in a decade. Despite the moderation of global premium growth expected in 2025-26—projected at 2.3% annually in real terms, below the five-year average of 3.1%—the market will remain resilient.
In the life insurance sector, Swiss Re anticipates global life insurance premiums will reach $4.8 trillion by 2035, up from $3.1 trillion in 2024, spurred by higher interest rates. In particular, U.S. individual annuity sales are projected to reach a new record of over $400 billion in 2024. As monetary policies loosen, the focus may shift from fixed-rate annuities to indexed annuities, slowing growth in fixed-rate products.
Growth in Global Primary Insurance Market
Swiss Re expects the global primary insurance market to experience above-trend growth in the next two years, driven by the inflection point in the non-life hard market. Life insurance sales, however, are expected to ease from recent highs. For the 2025-2026 period, the global insurance market is projected to grow by 2.6% annually in real terms, outpacing the average growth seen from 2019-2023 (1.6%). Factors such as steady global economic growth, resilient labor markets, and rising real incomes will continue to support demand.
In non-life insurance, commercial lines rates are expected to moderate, while personal lines rates still have room to rise. Underwriting profitability is expected to improve as lower inflation eases claims severity.
Swiss Re notes that life insurance demand will likely shift toward risk protection products as interest rates decline and savings products lose some of their appeal. In the global premium mix, life insurance accounted for 43% and non-life (including health) for 57% of total premiums in 2024, with this ratio expected to remain relatively stable over the next decade.
Capital Inflows and Market Softening
Swiss Re also points out that sustainable profitability in the re/insurance industry typically attracts capital inflows, which can help reduce protection gaps by improving access to coverage. However, the study warns that the hard market conditions following the inflation surge of 2021 and 2022 are fading, and price moderation is expected. While social inflation and rising natural catastrophe losses could counteract this softening in related portfolios, the overall outlook for pricing is now more moderate.
The company projects global non-life premium growth to slow significantly after 2024, decelerating to a 2.3% compound annual growth rate (CAGR) during 2025-26, compared to the 4.3% growth forecast for 2024. Advanced markets, particularly in the U.S. and Europe, are expected to experience the most significant slowdowns, with the U.S. market forecasted to fall from 4.7% growth in 2024 to 1.9% CAGR in 2025-26.
Emerging Markets Remain Key Growth Drivers
Emerging markets are expected to remain a strong engine for premium growth, driven by growing exposure rather than pricing. Swiss Re expects a 4.1% CAGR in global non-life premiums during 2025-26, slightly below 2024’s forecasted growth of 4.3%, but above the 3.7% average of the previous five years.
Among emerging markets, Asia—particularly India—will be a key driver of growth. Swiss Re projects India’s non-life premium growth at 8.0% in 2025 and 9.3% in 2026, bolstered by strong economic growth, rising demand for auto and health insurance, and government support for crop insurance.
In China, however, growth is expected to slow, with a 4.1% CAGR forecast for 2025-26, a significant decline from the 9.8% CAGR of the past decade. While economic stimulus may boost demand in cycle-sensitive insurance lines like motor and agriculture, overall growth will be tempered by weaker consumer confidence.
Cyber Insurance Market Faces New Challenges
Cyber insurance is emerging as a significant risk in an otherwise softening market. Swiss Re notes that the volume of cyberattacks has surged, with a 75% increase in incidents in the third quarter of 2024 alone. Despite these rising threats, the cyber insurance market is seeing softer pricing and widening coverage, driven by improved cyber hygiene and prudent underwriting practices.
The study also predicts that the global cyber insurance market will reach $16.6 billion by 2025. However, sustainable growth will depend on managing systemic exposures, such as those highlighted by the CrowdStrike outage incident in July 2024. These events demonstrate the aggregation risk posed by non-malicious events, where losses can quickly accumulate across software supply chains.
Swiss Re emphasizes the need for further investment in areas such as data collection, risk modeling, and contract consistency to address the increasing complexity of cyber risks.
Outlook for Life Insurance Premiums
Swiss Re expects global life insurance premiums to grow at more than double the historical pace over the next two years. After growing by 5% in 2024, the life insurance market is projected to reach $4.8 trillion by 2035, with emerging markets, particularly China and India, contributing to the bulk of the growth.
In advanced markets, life insurance premium growth is expected to stabilize, with North America being the key driver. Emerging markets will continue to see higher-than-average growth, with real premium growth expected at 5.7% during 2025-26 in these regions, fueled by strong demand for both savings and protection products.
Conclusion
Swiss Re’s outlook for the global insurance industry points to continued strategic growth, driven by improved profitability in both life and non-life sectors. While challenges such as social inflation, natural catastrophe losses, and rising cyber risks remain, the industry is expected to navigate these hurdles with increased capital inflows, stronger underwriting results, and a focus on managing systemic exposures. As the insurance market adapts to these changing dynamics, the next few years are set to be a critical period for growth and resilience.
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