MAPFRE Economics, the research arm of MAPFRE, a Spanish-domiciled insurer, in its latest Economic and Industry Outlook report, notes that the insurance sector holds firm against President Trump’s tariffs.
However, lower economic activity globally could impact the industry, so the optimistic outlook forecast at the beginning of 2025 has cooled down a bit.
Despite geopolitical uncertainty, economic growth and interest rates, according to the report, will continue to drive growth in the global insurance industry.
The report expects an increase in life insurance premiums of 4.3% and 3.9% in non-life insurance volume, with earnings prospects projected to look healthy.
Meanwhile, high interest rates mean financial income will continue to contribute significantly to profits, driven by the industry investments behaviours and the savings-linked life insurance business.
MAPFRE’s research arm also forecasts growth of 2.7% for the global economy for 2025, four-tenths of a point lower than the figure projected at the beginning of 2025, and 3% for 2026. Inflation forecasts are 3.4% for 2025 (one-tenth of a point lower) and 2.9% for 2026
The updated report projects economic deterioration will be more intense in the United States, and Europe is expected to be more moderate. The effect in Latin America would be disparate, however, in Asia, the trade dispute appears to be more pronounced and the measures announced thus far less conciliatory, explained the report.
The report builds on the original scenario of a global slowdown controlled by central banks. However, new risks in the international scenario have emerged due to the US tariff policy.
MAPFRE predicts more intense effects from the new scenario for the United States, with a sharper slowdown and higher price pressure that will hinder the Federal Reserve’s ability to intervene. The forecast for growth therefore is 1.9% for 2025 and 1.8% in 2026, compared to the 2.5% and 2%, respectively, initially forecast.
Across the Eurozone, MAPFRE Economics predicts less severe macroeconomic impairment and a more controlled inflation scenario.
In emerging countries, the growth forecasts stand at 3.3% and 3.5% for 2025 and 2026. Prices are on course to rise by 4.2% in the current year and 3.6% next year.
In Latin America, there are two sides to these trade tensions. Although they would point to lower external demand for the most dependent US partners, namely Mexico, these same countries could also benefit from commercial redirection and the attraction of capital inflows, explained the report.
Asia Pacific as a whole is expected to grow by 4.3% in 2025 and 4.4% in 2026, with inflation of 0.4% and 1%, respectively. It was previously expected that China would grow by 4.3% in 2025, which has been brought down to 4%, while the original economic forecast of 4% for 2026 is maintained, with inflation set to come in at 0.2% and 0.8%, respectively.
