Issued by Allianz Research, the report titles The future of insurance in a fragmenting world and comprehensively reviews the global insurance market in 2025, forecasts industrial trends from 2026 to 2036, and analyzes two structural headwinds: geopolitical fragmentation and climate-driven affordability crises.

1. Review of the 2025 Global Insurance Market

Global gross written premiums (GWP) reached EUR 6.9 trillion, rising 7.1% year-on-year. Life insurance remained the largest segment at EUR 2.861 trillion, followed by property & casualty (P&C) at EUR 2.320 trillion and health insurance at EUR 1.688 trillion. Although growth cooled from the 9.4% surge in 2024, it stayed above the 5.6% 10-year compound annual growth rate (CAGR).

Most premium expansion stemmed from inflation-driven rate hikes rather than wider insurance coverage. Global insurance penetration only edged up slightly to 7.2% of GDP, remaining lower than the level a decade ago. Segmental divergence stood out: health penetration climbed from 1.4% (2015) to 1.8% (2025), P&C penetration flatlined at 2.5%, while life penetration slipped to 3.0% from over 4% two decades earlier.

Regionally, North America dominated, lifting its global premium share from 42.5% to 46.4% over the past decade with EUR 3.191 trillion premiums in 2025. China ranked second with EUR 746 billion, accounting for 10.9% of the global total but still less than one-quarter of North America’s market size. Excluding China and Japan, Asia posted the fastest regional premium growth at 10.9% in 2025, while China’s growth moderated to 7.4%. Health insurance was the fastest-growing line with a 12.3% annual increase, largely fueled by U.S. medical inflation.

2. Macroeconomic & Geopolitical Headwinds

The Iran conflict acted as a major supply shock disrupting energy prices and global supply chains. Under the baseline scenario with a mid-year diplomatic truce, global GDP will grow 2.6% in 2026 (2.0% for the U.S., 4.7% for China, and merely 0.7% for the Eurozone). A prolonged Strait of Hormuz closure would trigger eurozone recession and broader global stagflation, forcing central banks to tighten rates aggressively.

Geopolitical fragmentation has fundamentally rewritten insurance operating logic. Cross-border capital mobility and global risk diversification weakened amid divergent regulations and sanctions. Insurers face higher capital costs and lower returns, while new demand surged for political risk, marine cargo, cyber and supply disruption coverage. The report advises carriers to adopt regionally resilient business models, integrate geopolitical assessment into underwriting, and launch dedicated products for emerging geopolitical risks.

3. 10-Year Market Outlook (2026–2036)

The global insurance industry will maintain structural growth with an overall CAGR of 5.3%. Health insurance will lead at 6.7% annually, followed by life (4.9%) and P&C (4.7%). By 2036, incremental global premiums will hit EUR 5.26 trillion, more than half of which will be generated in Asia.

North America will retain its 46% global market share, while Western Europe will keep losing ground (a 4 percentage point share drop over the decade). China will stay Asia’s core market with a 7.6% annual growth rate, and India will emerge as the world’s fastest major insurance market at 10.5% CAGR.

India boasts massive untapped potential: its 2025 insurance penetration stood at only 3.8% of GDP with per capita premium expenditure of EUR 85. Incomplete social security, rising middle-class wealth and national "Insurance for All by 2047" reforms will drive double-digit expansion across life, non-life and health segments.

4. Core Long-Term Challenge: Climate Risk & Affordability Crunch

Global natural catastrophe insured losses rise 5–7% annually in real terms. Surging insurance premiums have outpaced household purchasing power, pushing low-income groups out of coverage and widening protection gaps. Uncompensated climate losses ultimately burden public fiscal budgets, forcing governments in the U.S., France, Italy and Germany to roll out state-backed catastrophe insurance schemes.

Pure premium hikes cannot resolve insurability issues. The report proposes coordinated solutions including climate resilience incentives, targeted affordability subsidies, public-private risk-sharing frameworks and large-scale disaster-resistant infrastructure investment.

5. Key Conclusion

1. The 2025 growth slowdown reflects normalization instead of industry decline, yet real insurance depth improves marginally amid inflation-led premium inflation.

2. Geopolitical fragmentation becomes a lasting structural constraint requiring localized operational and underwriting adjustments for insurers.

3. Asia, especially India, represents the primary long-term growth engine, while North America maintains unrivaled market scale.

4. Health insurance remains the top growth track worldwide, supported by aging populations and mounting medical costs.

5. Climate change creates an affordability crisis that demands joint efforts from insurers, regulators and governments to sustain long-term insurability.