Global Insurance Market Forecast: Challenges Ahead by 2026
The Swiss Re Institute's recent sigma report forecasts a significant slowdown in global insurance premium growth by 2026. This projection is influenced by geopolitical instability, supply chain disruptions, and ongoing inflationary pressures. While less severe than past soft markets, rising repair and catastrophe costs could hinder potential pricing adjustments.
According to the report, global property and casualty (P/C) premiums are expected to rise by only 0.6% in 2026, a stark contrast to the 3.6% compound annual growth rate from 2015 to 2024. A slight recovery to 1% growth is anticipated by 2027. Advanced markets, specifically, face near-zero growth in 2026, marking their weakest performance in nearly two decades. In the U.S., a 0.5% contraction in premiums is projected, driven by weakened competitive rates across most insurance lines.
The global commercial insurance pricing index from Marsh reveals a continuing decline, with a 5% drop in the first quarter of 2026—its seventh consecutive quarterly decrease. Notably, commercial property insurance prices fell by 9%, while professional lines and cyber insurance each saw reductions of 5%. Conversely, casualty insurance rates increased by 3%, influenced by escalating loss-costs due to large jury awards in the U.S.
In the personal lines sector, competitive dynamics are driving a softening trend, with an emphasis on pricing and terms over rate hikes. U.S. personal auto insurance prices are nearly negative, whereas homeowners insurance experiences moderate gains, supported by increased exposure to natural catastrophes and the inflation-driven rise in rebuilding costs.
Global P/C insurance profitability hit a peak in 2025, with a return on equity (ROE) of 14%, well above the 7.1% average ROE from 2015 to 2024. However, Swiss Re projects ROE to fall to 11.4% in 2026 and 7.7% by 2028. Rising inflation, influenced by global conflicts, could impact repair, replacement, and liability costs, possibly stabilizing pricing pressures.
Jérôme Haegeli, Swiss Re’s Group Chief Economist, noted that current geopolitical and economic challenges indicate a broader structural trend in global risk, highlighted by multiple recent supply shocks. Furthermore, the report examines the burgeoning AI investment boom and its implications for the insurance sector, predicting significant demand for risk management solutions in property, engineering, cyber, and liability insurance.
Ivan Gonzalez, CEO of Swiss Re Corporate Solutions, emphasized the risks associated with AI infrastructure investments, especially in disaster-prone areas. Approximately 40% of U.S. data center capacity resides in high tornado activity zones, with over 25% exposed to frequent large hail events. These insights and more are detailed in the Swiss Re Institute's sigma report, titled “World Insurance in 2026: Shock Absorbers in a Fragmenting World.”