Global insurance premium growth to slow to 2% in 2025, Swiss Re warns

By Ashish Tiwari

July 9 - (The Insurer) - Global insurance premium growth is expected to slow to 2.0% in 2025, down from 5.2% last year, Swiss Re Institute said in its World Insurance Sigma report on Wednesday.

The slowdown was attributed to global macroeconomic uncertainty, fuelled by U.S. tariffs. Swiss Re said it expects premium growth to pick up marginally at 2.3% in 2026.

This is in line with global GDP trends, where growth is expected to slow to 2.3% in 2025 and 2.4% in 2026, compared with 2.8% in 2024.

Non-life premium growth is projected to decelerate to 2.6% this year from 4.7% in 2024, while life insurance premiums will rise just 1%, down from 6.1% last year.

Jérôme Haegeli, Swiss Re's group chief economist, said: "While insurers' profitability outlook is still benefiting from rising investment income, we expect tariffs to slow global GDP growth, and consequently weigh on insurance demand.

"In the long term, U.S. tariff policy is another move towards more market fragmentation, which would reduce the affordability and availability of insurance, and so diminish global risk resilience."

STAGFLATIONARY SHOCK

U.S. tariff policy is creating a stagflationary shock, the report warned.

“It reduces global trade, raises costs and erodes risk resilience by making insurance less affordable and accessible,” Haegeli said.

U.S. motor physical damage insurance is forecast to be among the most impacted lines due to higher costs for vehicle repair and replacement driven by import tariffs on auto parts.

Repair and replacement costs are expected to grow by 3.8% in 2025. However, this remains lower than the post-pandemic surge seen in 2021-22.

Europe may endure macroeconomic turbulence. However, China's growth is expected to slow to 4.7%, compared to 5% last year.

Swiss Re highlights long-term risks to the sector from growing market fragmentation, which could lead to higher claims costs, disrupted capital flows and less efficient risk pooling across borders.

However, sectors like credit and surety and marine insurance outside the U.S., may benefit from supply chain realignment.

Despite these headwinds, the report said insurers’ profitability is benefiting from rising investment income, even as both life and non-life sectors face slower premium growth.