Global life insurance premiums are projected to grow at an annual rate of 3% in 2025 and 2026, more than double the growth rate of the past decade, according to Swiss Re’s latest sigma report.
Factors such as rising real wages, elevated interest rates in key markets like the United States, aging populations, and a growing middle class in emerging markets are expected to drive demand.
Swiss Re’s CEO of life and health reinsurance, Paul Murray (pictured above), highlighted how demographic shifts and economic conditions are converging to support this growth
It’s a favorable convergence, since retirees are looking for stable and worry-free income, and the insurance industry is stepping up to meet this demand. Driven by a still elevated interest rate environment in the US, global life insurance premiums are set to reach US$4.8 trillion by 2035, up from US$3.1 trillion in 2024,” Murray said.
Savings products are experiencing significant demand, particularly in the United States and China. In the US, individual annuity sales are expected to exceed US$400 billion in 2024, compared to an average of US$234 billion over the past decade.
Meanwhile, in the United Kingdom, demand for fixed-rate annuities is expected to remain elevated through 2024 before tapering off in subsequent years.
In China, anticipated reductions in guaranteed interest rates for savings products have spurred strong sales. This demand is likely to persist, supported by the appeal of longer-term savings solutions.
Swiss Re’s report also predicts that consumers in advanced markets will increasingly shift from fixed annuities to index-linked policies as central banks lower interest rates. In Europe, unit-linked products have seen significant growth, particularly in Italy and France, and this trend is expected to expand to the US and other markets by 2025.
The life risk protection segment is expected to grow by 2.7% annually in 2025 and 2026, slightly below its long-term trend of 3.7% per year from 2014 to 2023. Demand for these products has been less sensitive to interest rate fluctuations, as re-pricing occurs more gradually.
Read More: US growth outpacing global markets in 2024 – Swiss Re
Swiss Re highlighted robust demand in European markets for disability and long-term care insurance, driven by factors such as rising healthcare costs, aging populations, and improved mortgage markets.
In the US, individual life protection sales are forecast to remain flat, while group life and health insurance sales are expected to be slightly more resilient, supported by strong employment levels and wage growth.
In the non-life sector, global premiums are expected to grow by 4.3% in 2024 before slowing to an average annual growth rate of 2.3% in real terms for 2025 and 2026. This is below the 3.1% average annual growth of the past five years. Elevated claims have prompted repricing of risks, and the sector is likely to see improved profitability, supported by higher investment returns from elevated interest rates.
Swiss Re forecasts an industry return on equity of 10% for 2025 and 2026 in the six largest non-life markets, exceeding the cost of capital.
Swiss Re projects global GDP growth to average 2.8% in 2025 and 2.7% in 2026, down from the pre-pandemic average of 3.1%. However, significant regional differences are expected, influenced by geopolitical tensions and trade policy uncertainty.
In the US, real GDP is expected to grow by 2.2% in 2025 and 2.1% in 2026, supported by strong consumer fundamentals. Meanwhile, Europe’s economic growth is forecast to remain subdued, with Euro-area GDP increasing from 0.9% in 2025 to 1.1% in 2026.
China’s growth is projected to slow to 4.6% in 2025 and 4.1% in 2026 due to structural challenges, despite recent monetary easing and fiscal stimulus measures.
Swiss Re group chief economist Jérôme Jean Haegeli emphasized the importance of proactive scenario monitoring for insurers in navigating heightened geopolitical and macroeconomic risks.
“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 raises risks of adverse macro scenarios. Early and proactive scenario monitoring will be critical for the insurance industry,” he said.
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