Fitch Ratings assigns a ‘neutral’ global industry outlook for insurance to 2026, reflecting a stable operating environment in most markets and the industry remaining resilient despite increasingly challenging conditions in specific markets.
While the overall situation remains stable, the rating agency noted that deterioration in some regions remains limited to the UK London market, Global Reinsurance, US Health and Mexico, as well as the life insurance markets in China and Taiwan.
“We expect underwriting margins and investment yields to peak in 2026 or decline from healthy levels in 2025, while volume growth is likely to be more modest. This explains the negative outlook revisions across Europe and across the commercial and specialty insurance sectors,” said Harish Gohil, global head of insurance.
To reflect these expectations, Fitch revised the outlook for the U.K. London market to “worsened” from “neutral”, a shift that reflects expectations for lower underwriting margins following sharply weaker interest rates starting in 2025.
At the same time, the industry outlook for Italian life insurance and German non-life insurance was adjusted from “improving” to “neutral”, reflecting the agency’s belief that business volume growth will slow down in 2026 and profitability will remain stable.
Fitch in September revised its 2026 outlook for the global reinsurance industry to “deterioration” as underlying operating and commercial conditions are likely to worsen from the previous year.
In the United States, the outlook for the health sector remains “worsened” as health care costs continue to rise.
However, most other U.S. and Asia-Pacific insurance markets maintain a “neutral” outlook, supported by stable operating margins, prudent asset liability management and strong solvency buffers.
This year, Fitch launches sector outlooks for selected emerging markets in Europe, the Middle East and Africa. Saudi Arabia’s non-life insurance outlook is “improving,” underpinned by expectations for improving underwriting profitability in 2026 from a weak base in 2025.
Mexico’s outlook was revised to “worsened” due to lower financial performance and capital strength due to revenue law changes.
Fitch stressed that markets should pay close attention to deflationary asset prices, financial market volatility and higher-than-expected default rates, as they could impact financial conditions through investment losses.
The market also needs to pay attention to monetary policy. Although easing will lead to a decline in investment yields, the negative impact will be gradual; some life insurance markets have increased exposure to illiquid assets.
Another topic Fitch recommends paying close attention to is regulatory developments such as increased scrutiny of asset-intensive reinsurance, the EU’s Solvency II review and the introduction of economic value-based solvency regimes in Japan and Taiwan.
