Paul Murray, CEO of Swiss Re Life & Health Re, said that higher interest rates will bring strong profitability to the life and health sector in 2025, but reinsurers/insurers will need to seriously address emerging risks such as mental health, metabolic health, mortality trends and upgraded technologies as they enter 2026.
According to data from the Swiss Re Institute, life insurance premium income will grow by 2.2% by 2025, and the market size is expected to exceed the US$4 trillion mark in the next two years. Health insurance premiums increased by more than 5%, the fastest growth rate in ten years. However, Murray noted that much of this increase is driven by rising medical costs.
Murray also discussed artificial intelligence (AI), noting that global insurance companies are allocating 3-8% of their IT budgets to AI, with a focus on improving efficiency and automating tasks, freeing experts to perform higher-value work.
“The experience of AI in 2025 shows that technology alone cannot be transformative,” Murray said. “I believe the organizations that make the most progress are those that combine technology with technical people (underwriters, claims experts, data analysts) who apply judgment and context. We continue to believe that the true value of AI will be revealed when human expertise is augmented by well-designed AI support.
“Insurers will also benefit from AI in parallel industries. For example, accelerating medical research into cancer and Alzheimer’s may contribute to increases in life expectancy.”
He also highlighted that all-cause mortality in many regions remains higher than pre-pandemic norms, although this trend is gradually improving.
In the U.S., Swiss Re is seeing a meaningful turnaround with excess all-cause mortality declining and is optimistic this will continue.
Murray added: “Swiss Re’s research shows that GLP-1 drugs could reduce all-cause mortality by about 4% in the general U.S. population over the next 20 years; if accompanied by widespread lifestyle changes, this improvement could be more than 6%. Additionally, the wave of opioid deaths that contributed to excess mortality appears to have subsided. Encouraging data released by the Centers for Disease Control and Prevention (CDC) show that mortality in this area is slowly declining.”
Additionally, Swiss Re has long viewed the impact of mental health trends as an emerging risk.
He explains: “This year, developments in the impact of mental health on claims in Australia have revealed an unpleasant truth – some of our products no longer meet the reality of long-term change. For example, over the past 10 years the Australian Council of Life Insurers has reported a 700 per cent increase in total and permanent disability (TPD) claims for mental health issues by people in their 30s. These claims are flowing into products that were simply not set up for this basic assumption.
“Tackling this situation will require a lot of work across the industry: from scrutinizing exposed portfolios to reassessing the way we think about insurance through prevention.
“It’s clear that early intervention and recovery needs to develop into an integral link in the insurance value chain. Some promising work is already underway. Swiss Re and Wysa’s mental health app shows real promise in deploying artificial intelligence to guide people on good mental health practices. Wysa reported a 30% reduction in symptoms of depression and anxiety. It’s still early days, but this is exciting.”
Murray concluded by emphasizing the need to remain vigilant about these emerging risks and remember that this is a lifelong undertaking.