WASHINGTON (dpa-AFX) - Swiss Re Institute, the data driven research firm of Reinsurer Swiss Re Ltd. (SSREY.PK), Tuesday said it expects total global insurance premiums would grow at 2.6 percent annually in 2025 and 2026, primarily driven by life insurance as interest rates remain higher for longer, mainly in the US.
According to the new sigma report 'Growth in the shadow of (geo-)politics', global life insurance premiums are forecast to grow at an annual rate of 3 percent in 2025 and 2026, more than double the rate of the past ten years.
Driven by a still elevated interest rate environment in the US, global life insurance premiums are set to reach $4.8 trillion by 2035, up from $3.1 trillion in 2024, the firm noted.
The Institute further projects solid global economic growth of 2.8 percent for 2025 and 2.7 percent for 2026, while geopolitical and financial risks are building up.
The global demand is continued to be supported by rising real wages, still elevated interest rates in key markets like the US, ageing populations, and a growing middle class in emerging markets.
With the still elevated interest rates, individual annuity sales in the US are expected to reach a new record of over $400 billion in 2024, well above the $234 billion average of the past ten years.
In the life risk protection business, Swiss Re Institute forecasts 2.7 percent annual premium growth in 2025 and 2026, below the long-term trend of 3.7 percent per year from 2014 to 2023.
As per the sigma report, the demand for fixed-rate annuities in the UK are expected to stay elevated in 2024 before slowing down during 2025 and 2026. In China, the anticipated reduction in guaranteed interest rates for savings products has been boosting sales.
European markets see robust demand for disability and long-term care insurance. In the US, individual life protection sales are expected to remain flat, while group life and health sales are slightly more resilient, supported by strong employment levels and wage gains.
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.'
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