Global life risk protection grows at 2.7% annually

Demand for protection products shows less sensitivity to interest rate changes.

The global life risk protection business is growing steadily but below its long-term trend, with a projected annual premium growth of 2.7% in 2025 and 2026, compared to the 3.7% annual growth recorded between 2014 and 2023, Swiss Re Institute revealed in its latest sigma report. 

Demand for protection products shows less sensitivity to interest rate changes, with slower repricing, but growth opportunities remain.  

In Europe, demand for disability and long-term care insurance is robust, driven by improving mortgage markets, rising healthcare and nursing costs, ageing populations, and product bundling. 

In the United States, individual life protection sales are expected to remain flat, whilst group life and health sales are more stable, supported by strong employment levels and wage increases.  

Global non-life insurance premiums are expected to grow by 4.3% in 2024, the highest in a decade. 

However, growth is forecast to slow to 2.3% annually in real terms for 2025 and 2026, below the five-year average of 3.1%. 

Despite this, profitability remains strong, supported by investment gains from elevated interest rates.  

Swiss Re Institute estimates a 10% return on equity (ROE) for the largest six non-life insurance markets in 2025 and 2026, surpassing the cost of capital.  

Global real GDP growth is forecast at 2.8% in 2025 and 2.7% in 2026, down from the 3.1% average of the pre-pandemic decade. 

Regional disparities persist, with risks heightened by geopolitical tensions and trade policy uncertainty.  

Swiss Re’s Group chief economist Jérôme Jean Haegeli highlighted ongoing inflation risks and the likelihood of fewer interest rate cuts, particularly in the United States, due to strong economic performance.

Elevated interest rates could benefit primary insurance markets, but the geopolitical and economic environment requires proactive risk monitoring.