Global insurance premium growth is expected to lose momentum over the next two years as the industry transitions from a period of exceptional expansion into a softer market cycle, according to the Swiss Re Institute.
In its Sigma Report No. 2/2026, the institute projected total global insurance premium growth of 1.3 per cent in real terms in 2026 and 1.6 per cent in 2027, down from the 3.9 per cent recorded in 2025.
The report attributed the slowdown to softer pricing across non-life insurance, slowing global economic activity and intensifying competition, although it noted that demand for insurance remains strong as businesses and households grapple with increasingly frequent economic, geopolitical and climate-related shocks.
Despite the weaker growth outlook, Swiss Re said the insurance sector continues to play an increasingly important role in helping economies manage rising risks in an increasingly fragmented global environment.
According to the report, the moderation will not be evenly distributed across insurance segments. Non-life insurance is expected to experience the sharpest slowdown, with real premium growth forecast to fall to 0.6 per cent in 2026 before edging up to one per cent in 2027.
Swiss Re said commercial and personal insurance lines are entering a softer pricing cycle, supported by robust industry profitability, ample capital and easing reinsurance costs. However, it warned that geopolitical tensions, particularly the conflict in the Middle East, could alter the outlook by increasing reconstruction costs and inflationary pressures.
The report estimated that by 2027, property rebuilding costs could rise by seven per cent in the United States and 11 per cent in Germany as higher repair, replacement and liability expenses filter through the market. Such cost increases, it said, could limit the decline in insurance pricing and prompt insurers to adjust premiums more aggressively if losses or inflation accelerate.
While profitability is expected to remain healthy, the report suggested that returns have likely peaked. Return on equity for non-life insurers is forecast to decline from 14 per cent in 2025 to 11.4 per cent in 2026 before easing further to 7.7 per cent by 2028.
The institute said investment income, buoyed by higher interest rates, will continue to provide an important cushion for insurers as underwriting margins come under pressure.
In contrast, the outlook for life insurance remains more resilient. Swiss Re forecast real premium growth of 2.3 per cent in 2026, above the long-term average of 1.9 per cent recorded between 2015 and 2024, although slower than the four per cent achieved in 2025.
The report said higher interest rates are supporting demand for savings products while also boosting insurers’ investment returns. However, performance is expected to vary across markets. Advanced economies are seeing slower growth in annuity products and weaker demand for protection policies amid affordability challenges, while emerging markets continue to benefit from favourable demographics and supportive regulatory environments.
Swiss Re also pointed to structural changes within the life insurance business, with insurers increasingly shifting towards capital-light, unit-linked products and expanding investments in private assets and private credit to improve long-term returns.
Regionally, the firm identified the United States and China as the world’s largest insurance markets by premium volume, while India is expected to remain the fastest-growing among the world’s 20 largest insurance markets, with real premium growth of 7.1 per cent in 2026.
Although premium growth is slowing from recent highs, Swiss Re maintained that the industry’s long-term prospects remain positive as rising economic uncertainty, natural catastrophes and geopolitical tensions continue to reinforce the need for insurance protection worldwide.
