The global property and casualty (P&C) insurance market is moving from a pricing boom to normalization after a period of significant interest rate hikes, according to the latest Global Insurance Report from Allianz Research.
The insurer’s data shows that global property and casualty insurance premiums will grow by +3.8% in 2025, well below the +8.5% increase in the previous year and the segment’s 10-year compound average growth rate (CAGR) of +5.6%. Allianz said the slowdown comes as the pricing cycle matures and claims inflation begins to stabilize.
While North America remains the industry’s dominant market, accounting for 52% of global property and casualty insurance premiums, its growth rate plummeted to +2.2% from +9.7% the previous year. Western Europe remained relatively resilient, growing by 5.3%, while Asian markets were less dynamic, growing by only 4%.
Overall, the data shows that the global insurance industry (including property, life and health insurance) is expected to grow by 7.1% to 69,000 euros in 2025, adding 456 billion euros to the global premium pool.
While growth has slowed down from a whopping 9.4% in 2024, it is still above the 10-year CAGR of 5.6%, indicating that the industry’s growth momentum remains strong.
Life insurance remains the largest segment, worth €2,861 billion, followed by property and casualty insurance, worth €2,320 billion, and health insurance, worth €1,688 billion.
Allianz reported that global life insurance premiums increased by +6.9% in 2025, down from the unusually strong +11.3% recorded in 2024, but still well above historical norms.
The slowdown is largely driven by North America, where the annuity boom is slowing as interest rate advantages start to lose steam, the report said.
At the same time, Asia has become the main growth engine, growing by 9.9% by 2025, with China growing by 11.4%. Analysts note that Asia remains the world’s largest life insurance market, supported by an aging population and high savings.
In terms of global health premiums, report data shows that driven by the aging population and rising medical costs, global health premiums will surge by 12.3% in 2025, the fastest rate since 2014.
North America grew by +14.9% as medical inflation further accelerated, with the US now accounting for over 70% of global medical premiums.
Although post-COVID-19 growth has normalized, Asia still has huge long-term potential as most markets still have penetration rates below 1%.
For the UK, the insurance market will achieve modest growth of +2.8% in 2025, about half the 10-year average, with total premium income reaching €408 billion.
This lackluster performance comes after a period of strong growth, with UK property and casualty insurance and healthcare growing at just +1.1% and +1.6% respectively.
Allianz Research analysts warn that a more fragmented global economy is making the risk environment more complex, challenging cross-border business models and undermining traditional diversification benefits.
However, this fragmentation also creates new growth opportunities by increasing demand for protection, resilience and specialized risk transfer in areas such as infrastructure, energy security and political risk insurance.
To thrive, insurers need to adapt by building more regionally resilient operating models, integrating geopolitical analysis more directly into underwriting and capital allocation, and developing products that target emerging risks.
In the next ten years, the global insurance market is expected to grow at an average annual rate of 5.3%, slightly higher than economic output.
Life insurance is expected to grow 4.9% annually due to rising interest rates, with Asia leading the way due to changing demographics. Driven by Asia’s huge potential, health insurance remains the most dynamic industry, with global growth of 6.7%.
Analysts emphasized that the absolute value of the global premium pool will increase by 52,600 euros in the next 10 years. Allianz said life insurance will be the main driver of this expansion, contributing €1,991 billion.
More than half of the additional premium pool will come from Greater Asia, amounting to €1,004 billion, more than North America (€416 billion) and Western Europe (€402 billion) combined.
In property and casualty insurance, Allianz expects 44% of the €1,505 billion in additional premiums to come from North America. In health insurance, Allianz expects additional premiums to reach 1,764 billion euros, most of which will come from the US market.
The report believes that the global insurance market is gradually moving eastward. It is expected that by 2036, North America’s global market share will remain at around 46%, declining by only 0.5 percentage points. In contrast, China and India are expected to grow by nearly 4 percentage points.
While Eastern Europe’s relative weight continues to decline, it is expected to decline by 4 percentage points over the next decade, an improvement from the previous decline of 5.3 percentage points.
For the UK, overall annual growth is expected to be +3.4%, in line with nominal GDP +3.6%. Allianz Research predicts that global property and casualty insurance will grow by 4.7% by 2036 as demand for protection increases.
Ludovic Subran, chief economist and chief investment officer at Allianz, said: “Geopolitical fragmentation is reversing many of the assumptions that have shaped the global economy for decades. As trade, capital flows and regulations become increasingly fragmented, resilience is replacing efficiency as the dominant organizing principle.
“This shift has made the operating environment more complex and costly, making the push for affordability even more urgent. The strategic importance of insurance is at risk: not just as a mechanism for risk transfer, but also as a key enabler of investment, innovation and economic confidence.”
