Despite growing pressures such as the U.S.-Iran war, weak economic growth, rising inflation and rising government bond yields, business conditions in most insurance markets remain resilient, leading Fitch Ratings to maintain a “neutral” rating on the global insurance industry through mid-2026.
The rating agency’s outlook for the global insurance industry is in line with its baseline expectations following the outbreak of war with Iran.
Fitch did warn that weak volume growth and slightly higher claims inflation could put pressure on non-life underwriting margins, particularly in commercial lines where pricing has begun to soften.
For life insurers, Fitch said, improving investment yields and stabilizing long-term savings trends are likely to largely offset a modest rise in policy lapse rates and weakness in new business.
The rating agency explained that while most insurers maintain high-quality, diversified investment portfolios consistent with their generally prudent investment risk appetite, late-cycle market and credit risks remain a major headwind for insurers.
Harish Gohil, global head of insurance at Fitch Ratings, commented: “Fitch Ratings expects the global insurance industry to be quite resilient to heightened risks following the outbreak of the Iran war. Some non-life insurance sectors have shown a slight ‘worsening’ bias, reflecting their greater exposure to inflation risks and weaker economic growth relative to the life insurance industry.”
For global reinsurance and the UK London market, Fitch maintained its “deteriorating” outlook, noting that the impact of a softening pricing cycle is starting to become more apparent.
Additionally, the outlook for the U.S. health sector remains “deteriorated” and Fitch expects a material recovery in margins is unlikely in 2026.
