Swiss Re Institute, in World Insurance sigma, projects inflation-adjusted global GDP growth slows to 2.3% in 2025 and edges to 2.4% in 2026, down from 2.8% in 2024.
Global growth already loses momentum as US tariff policy cuts trade and drives uncertainty. Consumers and firms have started trimming spending and investment in response, and the hard data often lags the mood, so parts of the pullback stay out of sight for now.
Premium growth tracks the macro slowdown. Swiss Re expects total global premiums rise 2% in 2025 after 5.2% in 2024, then move to 2.3% in 2026.
Investment income lifts profitability, yet tariffs weigh on GDP and pressure insurance demand, Jerome Haegeli, Swiss Re Group Chief Economist, said.
The timing stings. Global growth slows during large macro regime shifts, and extreme policy uncertainty persists, driven mainly by US goods tariffs.
Beinsure noted trade wars and protectionism produce no winners, then reshape trade routes and production over time. A more fragmented world brings sharper risks for firms and consumers, with more volatile exchange rates and asset prices, and Middle East conflict developments add fuel. Over the long run, US tariff policy pushes market fragmentation further, reduces insurance affordability and availability, then weakens global risk resilience.
Fitch Ratings sees EMEA insurers avoid direct hits from US tariffs, yet they carry meaningful exposure to second-round effects.
Geopolitical tensions, retaliatory measures, and tariffs slow global growth and add financial market volatility. Insurers then face pressure on investment performance and underwriting outcomes.
Tariff size matters. Single-digit tariffs aim to reshape a supply chain, double-digit tariffs aim to replace one. Most goods arrive as component stacks from multiple sources, autos and homes sit right in the middle.
For the US, tariffs deliver a stagflationary shock. A stagflationary shock for the US, again.
US policy swings under the current administration have pushed a reset in confidence, and global capital treats the US less like a default safe haven.
After several years of the fastest post-pandemic growth in the US versus Canada, the UK, Germany, Italy, France, Japan, Australia, Swiss Re forecasts US GDP growth at 1.5% in 2025, slowing from 2.8% in 2024. Swiss Re Institute lowered 2025 growth views for most major economies as a result.
Tariffs hit primary insurers through premium growth, claims, and investment returns, and geography decides who eats the damage.
Swiss Re flags the largest, most direct impact in US non-life claims severity, with US motor and construction taking the front-row hit. Outside the US, tariffs more often look disinflationary, easing pressure on claims.
As global supply chains lose efficiency and US industries gain more insulation from foreign competition, Swiss Re sees US inflation settle structurally higher on average. US consumers take the hardest hit from higher prices, then cut spending. US growth depends heavily on household consumption, so weaker demand feeds back into GDP.
Swiss Re Institute expects a rebound later in 2026 as the economy adjusts to higher tariff rates and labor market conditions stabilize, according to Beinsure analysts, with growth firming to 1.8%. Tariffs have raised costs for auto parts, vehicles, and building materials, inputs insurers price every day in personal lines. Higher repair costs and rising used car prices narrow profit margins.
Commercial insurers face a different risk map. Many operate across broader geographies, so tariff-driven price pressure hits them with less force in the near term, though the direction stays ugly.
Over the medium to long term, reduced flows of goods, services, capital, and people create a structural headwind for potential growth.
In Europe, policy uncertainty alone weighs on activity, and Swiss Re forecasts 0.8% growth in 2025. US–EU trade negotiations drive the main downside risk to the baseline, and weaker 2025 growth sets up a brighter 2026 if policy noise cools. A more expansionary fiscal stance by Germany’s new government, plus supportive credit conditions tied to further ECB rate cuts, should lift euro area growth to 1.3% in 2026.
China also slows. Swiss Re expects China’s GDP growth at 4.7% versus 5% in 2024 as tariffs and persistent uncertainty disrupt activity.
The risks and costs from accelerating fragmentation of economies and markets look serious for insurance.
