The global insurance market is set to continue to grow despite a cooling in its momentum.

Allianz Research, the research arm of the German insurance giant has published its latest “Global Insurance Report”, which analyses developments in insurance markets worldwide. 

According to the report, the global insurance industry is estimated to have grown by +7.1% to EUR6.9 trillion in 2025, adding EUR456 billion to the global premium pool. Although growth moderated from the exceptional +9.4% recorded in 2024, it remained comfortably above the 10 year compound average growth rate (CAGR) of +5.6%, confirming that the industry’s growth drivers remain firmly intact. Life insurance remained the largest segment (EUR2,861 billion), followed by P&C (EUR2,320 billion) and health (EUR1,688 billion).

The P&C market is moving from pricing boom towards normalisation. Global premiums increased by +3.8% in 2025, well below both last year’s +8.5% expansion and the segment’s ten year CAGR of +5.6%, as pricing cycles matured and claims inflation began to stabilize. North America remained the industry’s dominant market, accounting for 52% of global P&C premiums, although growth slowed sharply to +2.2% from +9.7% in the previous year. Western Europe remained comparatively resilient with growth of +5.3%, while the Asian market was less dynamic expanding by only +4.0%.

“Geopolitics and fragmentation are becoming central forces shaping the insurance industry,” the report added. “A more fragmented global economy is making risk environments more complex, challenging cross-border business models and weakening traditional diversification benefits. At the same time, fragmentation is also creating new growth opportunities by increasing demand for protection, resilience and specialized risk transfer across areas such as infrastructure, energy security and political risk insurance.

“Insurers will need to adapt by building more regionally resilient operating models, integrating geopolitical analysis more directly into underwriting and capital allocation, and developing products tailored to emerging risks.”

It continued: “Overall, the global insurance market is expected to grow at an annual rate of +5.3% over the next ten years, slightly above economic output. For the UK, overall annual growth is expected to be +3.4% (nominal GDP: +3.6%). For P&C, we expect global annual growth of +4.7% up to 2036 (UK: +3.4%).

“The segment will show solid growth rates in almost all markets, as the increasing need for protection is a global phenomenon. Allianz Research also remains confident about life insurance, which can expect annual growth of +4.9% thanks to higher interest rates (UK: +3.4%). Wider Asia remains the growth engine, driven by the need for private provision in the face of accelerating demographic change. The smallest segment, health insurance, should remain the most dynamic, with annual growth of +6.7% (UK: +3.3%). Asia in particular still has a lot of catching up to do.”

In absolute terms, it predicts the global premium pool will grow by EUR5,260 billion over the next ten years. Most of this growth will come from life insurance (EUR1,991billion). More than half of this additional premium pool will be generated in Wider Asia (EUR1,004 billion), exceeding North America (EUR416 billion) and Western Europe (EUR402 billion) combined. In P&C insurance, 44% of the additional premiums of EUR1,505 billion will come from North America. In health insurance, we expect additional premiums of EUR1,764 billon, most of which will come from the US market.

The global insurance map will continue shifting eastward, albeit gradually. North America is expected to retain a global market share of roughly 46% through 2036, surrendering only marginal ground over the next decade (-0.5%). India and China, by contrast, are expected to continue gaining relevance, together adding almost 4% of global market share. Western Europe will continue to lose relative weight. A glimmer of hope for the Old Continent: while it lost 5.3% of market share in the last decade, it may lose “only” 4% in the next decade.

“Geopolitical fragmentation is reversing many of the assumptions that shaped the global economy for decades,” said Ludovic Subran, chief economist and chief investment officer at Allianz. “As trade, capital flows and regulation become increasingly fragmented, resilience is replacing efficiency as the dominant organising principle. This shift is making the operating environment more complex and costly, making the push for affordability even more urgent. Nothing less than insurance’s strategic importance is at stake: not only as a mechanism for risk transfer, but also as a critical enabler of investment, innovation and economic confidence.”