Deloitte pegs global insurance protection gap at $183b

Deloitte says tariffs and trade disruption affect auto and home claims and adding pressure to premiums.

Insurers are heading into 2026 with slower growth and tighter margins, according to Deloitte’s global 2026 insurance outlook. 

After several years of strong pricing, non-life premium growth is expected to cool as competition increases and rate rises become harder to sustain.

In the United States, underwriting performance improved sharply in 2024, but the outlook is softer. 

The combined ratio is expected to worsen from 97.2% in 2024 to 98.5% in 2025 and 99% in 2026, pointing to weaker underwriting profitability. 

In parts of Europe, including France, Germany and the UK, return on equity is expected to rise from 9.1% in 2024 to 11.6% in 2025 as inflation and cost pressures ease.

Claims costs remain a key issue. Deloitte says tariffs and trade disruption can raise repair and rebuild costs, affecting auto and home claims and adding pressure to premiums. Commercial lines are also exposed. 

Marine and aviation insurers face added risk from rerouted shipping, port congestion and geopolitical tensions. Natural catastrophe losses continue to push reinsurance pricing higher and tighten terms. 

With insurers retaining more risk and reinsurance becoming more expensive, Deloitte estimates the global protection gap at $183b.

Life insurance growth is also expected to slow as uncertainty makes consumers more cautious, but annuities remain a bright spot. 

In the United States, annuity sales rose 12% in 2024 to a record $432.4b, and quarterly sales stayed above $100b through the second quarter of 2025. Insurers are also shifting investment strategies. 

Managed assets tied to insurers increased 25% in 2024 to $4.5 trillion, and private placements rose to 21.1% of insurance assets under management.

The report also flags industry changes, including broker consolidation, increased use of captives, and more risk transfer through catastrophe bonds and sidecars. 

Deloitte estimates AI-driven fraud analytics could save P&C insurers up to $160b by 2032, but says many carriers still need stronger data and systems to scale those tools.