The insurance sector maintained its resilience through 2025 despite mounting risks from extreme weather events, geopolitical uncertainties and cyber threats, while real premium growth was seen in most jurisdictions, according to a recent OECD report.
The global insurance business saw strong premium growth in both life and non-life insurance markets, while profitability continued to rise in most jurisdictions, according to the OECD’s Global Insurance Market Trends 2026 report published on Nov. 2.
The report showed that the sector weathered recent macro-level challenges relatively well.
Total insurance penetration across OECD jurisdictions rose to an average of 6.6% of gross domestic product (GDP) in 2025, up from 6.2% in 2024.
Penetration in reporting non-OECD countries surged from 3.7% to 4.2% over the same period.
The report noted a slight decline in life insurance penetration, while non-life insurance penetration grew over the last decade.
Non-OECD countries saw a rise in life insurance penetration, but their non-life penetration remained mostly stable.
Total insurance penetration in lower-middle-income countries remained low at 0.7% of GDP last year, versus 6.7% in high-income jurisdictions, the data showed.
Real non-life premium growth persisted, albeit at a slower pace, with premiums growing 8.7% nominally and 4.1% in real terms, while 46 out of 53 reporting jurisdictions posted real growth.
Non-life growth was driven by pricing adjustments insurers introduced to offset higher claims costs, especially in the auto and health insurance segments.
Cost inflation, rising healthcare spending and losses from extreme weather events in some countries drove up claims payments across markets, but underwriting performance remained strong in most jurisdictions.
Some 34 out of 39 jurisdictions with available data showed a combined ratio below 100%, indicating underwriting profitability. These countries included Slovenia at 72.6%, Nicaragua at 74.7%, Paraguay at 81% and the US at 92.9%.
The ratios exceeded 100% in Colombia, Argentina, Finland and El Salvador, meaning that insurers collected less in premiums than they paid out in claims and expenses, the data showed.
Meanwhile, life insurance markets saw continued strong growth last year, averaging an 8.7% nominal increase and a 4% real increase in premiums. A total of 41 out of 52 jurisdictions, including Türkiye, posted real growth, driven by strong demand for investment-linked products, favorable financial conditions, pension reforms, occupational pension expansions and more.
Life claims payments fell in real terms across half of the reporting countries, the report said.
Real investment returns were mixed compared with the previous year amid inflation, soaring long-term interest rates and varied portfolio structures.
Overall profitability remained strong, with insurers' return on equity averaging 16.7% in the life sector and 15.7% in the non-life sector.
At the same time, global reinsurance capital reached a record $785 billion by the end of last year, driven by a 45% surge in catastrophe bond issuances to $25.6 billion.
Leading insurers saw a profitable year in 2025, with return on equity averaging 19% for the third year in a row, putting downward pressure on reinsurance rates.
Meanwhile, the global risk outlook remained challenging last year, with climate-related risks and cyber threats among the leading categories cited by national authorities.
The cyber insurance market grew to an estimated $15 billion, with penetration of 60% to 85% among large corporations but only 10% to 30% among small and medium-sized enterprises.
Global insured losses from natural disasters fell from $137 billion in 2024 to $107 billion, against economic losses of $220 billion, down from $318 billion.
Climate-related risks remained prominent, with geopolitical developments drawing attention due to their potential implications for economic conditions and claims costs, the report added.
