The global property and casualty (P&C) insurance market is moving from a pricing boom towards normalisation after a period of aggressive rate hikes, according to Allianz Research’s latest “Global Insurance Report.”
The insurer’s data shows that global P&C premiums grew by +3.8% in 2025, well below both the prior year’s +8.5% surge and the segment’s 10 year compound average growth rate (CAGR) of +5.6%. According to Allianz, this slowdown comes as pricing cycles matured and claims inflation began to stabilise.
While North America remained the industry’s dominant market, accounting for 52% of global P&C premiums, its growth plummeted to +2.2% from +9.7% in the previous year. Western Europe remained comparatively resilient with growth of +5.3%, while the Asian market was less dynamic expanding by only +4%.
Overall, the data finds that the global insurance industry, so P&C and life and health, is estimated to have grown by +7.1% to EUR6.9trn in 2025, adding EUR456bn to the global premium pool.
Although growth moderated from the exceptional +9.4% seen in 2024, it continues to outpace the 10 year CAGR of +5.6%, indicating that the industry’s growth drivers remain strong.
Life insurance remained the largest segment, valued at EUR2,861bn, followed by P&C at EUR2,320bn, and health, which accounted for EUR1,688bn.
Global life premiums grew by +6.9% in 2025, reports Allianz, down from the exceptionally strong +11.3% recorded in 2024 but still comfortably above historical norms.
According to the report, this moderation was driven mainly by North America, which has experienced a slowing annuity boom as interest rates advantages have started to lose momentum.
Meanwhile, Asia became the primary growth engine with a +9.9% in 2025, led by China’s +11.4% expansion. Supported by aging demographics and high savings, Asia remains the largest global life insurance market, analysts noted.
On global health premiums, the report’s data revealed a +12.3% surge in 2025, the fastest since 2014, driven by aging populations and rising medical costs.
North America grew by +14.9% as medical inflation accelerated further, with the US now accounting for more than 70% of global health premiums.
While the post-Covid surge normalised, Asia offers significant long-term potential, as penetration remains below 1% in most general markets.
For the UK, the insurance market achieved moderate growth of +2.8% in 2025, around half its 10 year average, with total premium income of EUR408bn.
This muted performance follows a supercharged period of growth, with UK P&C and health segments flatlining at just +1.1% and +1.6% growth, respectively.
Allianz Research analysts warned that a more fragmented global economy is making risk environments more complex, challenging cross-border business models and weakening traditional diversification benefits.
However, this fragmentation is also creating new growth opportunities by increasing demand for protection, resilience and specialised risk transfer across areas like infrastructure, energy security and political risk insurance.
To thrive, insurers will need to adapt by building more regionally resilient operating models, integrating geopolitical analysis more directly into underwriting and capital allocation, and developing products tailored to emerging risks.
Over the next decade, the global insurance market is projected to grow at an annual rate of +5.3%, slightly above economic output.
Life insurance is expected to grow +4.9% annually due to higher interest rates, with Asia leading due to demographic shifts. Health insurance remains the most dynamic sector with +6.7% global growth, driven by significant potential in Asia.
The global premium pool will grow by EUR5,260bn in absolute terms throughout the next 10 years, analysts highlight. Life insurance will be the primary driver of this expansion, contributing EUR1,991bn, according to Allianz.
More than half of this additional premium pool will be generated in Wider Asia, with EUR1,004bn, exceeding North America (EUR416bn) and Western Europe (EUR402bn) combined.
In P&C insurance, Allianz expects 44% of the additional premiums of EUR1,505bn will come from North America. In health insurance, Allianz expects additional premiums of EUR1,764bn, most of which will come from the US market.
According to the report, the global insurance market is gradually shifting eastward. North America is expected to maintain a global market share of around 46% through 2036, losing only 0.5pp. Conversely, China and India are projected to gain nearly 4pp.
While Eastern Europe’s relative weight continued to decline, its anticipated 4pp loss over the next decade is an improvement over the 5.3pp lost previously.
For the UK, overall annual growth is expected to be +3.4%, aligned with a nominal +3.6% GDP. Globally, Allianz Research forecasts P&C growth at +4.7% up to 2036, as protection needs rise.
Ludovic Subran, Chief Economist and Chief Investment Officer at Allianz, said: “Geopolitical fragmentation is reversing many of the assumptions that shaped the global economy for decades. As trade, capital flows and regulation become increasingly fragmented, resilience is replacing efficiency as the dominant organizing principle.
“This shift is making the operating environment more complex and costly, making the push for affordability even more urgent. Nothing less than insurance’s strategic importance is at stake: not only as a mechanism for risk transfer, but also as a critical enabler of investment, innovation and economic confidence.”
