Global growth is decelerating as US tariff policy reduces trade and heightens uncertainty. According to Swiss Re Institute's World Insurance sigma, global GDP growth (inflation adjusted) is expected to slow to 2.3% in 2025 and 2.4% in 2026 from 2.8% in 2024.
The volatile nature of US policy changes under the current administration has ushered in a paradigm shift of diminished confidence in the US government, eroding its status as a "safe haven" for global capital. Consequently, Swiss Re Institute has lowered growth expectations for most major economies in 2025.
According to the press release, after a strong 2024, growth in the global insurance industry is slowing in both life and non-life sectors. Swiss Re Institute forecasts 2% year-on-year total premium growth in 2025 and 2.3% in 2026, about half the growth rate of 2024.
In non-life insurance, intensifying competition in personal lines and softening market conditions across commercial lines, are driving significantly lower premium growth, down to 2.6% this year from 4.7% in 2024. After delivering 6.1% premium growth in 2024, life insurance will slow significantly to 1% as interest rates moderate, with growth to improve to 2.4% in 2026. At the same time, insurers' profitability outlook remains positive due to continuing gains in investment income.
Key takeaways of the report:
- US tariffs affect global economic growth, which is forecast to slow to 2.3% in 2025, down from 2.8% in 2024
- Amid unstable policy environment and competitive pressures, both life and non-life insurers see decelerating premium growth
- Tariffs impact to hit US motor physical damage hardest, but pockets of underwriting opportunity may emerge
"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, US tariff policy is another move towards more market fragmentation, which would reduce the affordability and availability of insurance, and so diminish global risk resilience", commented Jérôme Haegeli, Swiss Re's Group Chief Economist.
