Life insurance drives global premium growth

Written by Adam Cadle

19/11/2024

Global life insurance premiums are forecast to grow at an annual rate of 3% in 2025 and 2026, more than double the rate of the past ten years, according to the Swiss Re Institute.

Overall, total insurance premiums are set to grow at 2.6% annually in 2025 and 2026, with elevated interest rates, mainly in the US, supporting insurers’ profitability.

Paul Murray, Swiss Re's CEO life & health reinsurance, said: "The baby boomers are entering retirement at a time when higher interest rates reinvigorate the insurance savings market. It's a favourable 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$4.8trn by 2035, up from US$3.1trn in 2024."

On the non-life side, Swiss Re Institute said it expects a decade-high 4.3% global premium growth in 2024. In the following two years, premium growth is expected to decelerate, with global non-life premiums forecast to grow 2.3% annually in real terms, below the 3.1% average of the last five years.

Further improvements in investment results from still elevated interest rates should support overall profitability of non-life insurers, it said. Swiss Re Institute forecasts an industry return on equity (ROE) at 10% in 2025 and 2026 in the six largest non-life insurance markets, which would exceed the cost of capital.

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