Insurance News:
The Global Insurance Market in 2025

The Global Insurance Market in 2025 is characterised by stability, innovation, and cautious optimism for future growth. After several years of hard market conditions, the sector has entered a period of softening rates and increased capacity, particularly in non-life lines, while remaining vigilant in the face of emerging risks and regulatory pressures.

Global Market Overview

Globally, the insurance market has demonstrated resilience amid economic and geopolitical volatility. Non-life insurance has seen moderate growth, with softening in many regions due to increased competition and capacity, although certain segments, such as US casualty and natural catastrophe-exposed property, continue to experience challenging conditions and stricter underwriting. The life insurance sector is notably buoyant, with global premiums projected to grow at 3% in real terms over 2025 and 2026, more than twice the historical average, fuelled by higher interest rates and strong demand for savings and annuity products.

Innovation is a defining feature of the current landscape. The adoption of artificial intelligence (AI) is accelerating, with insurers leveraging advanced data analytics for underwriting, claims management, and product development. AI-related insurance is expected to generate significant new premium streams, while embedded insurance, offered seamlessly at the point of sale in sectors like automotive and real estate, is projected to exceed $722 billion in global premiums by 2030. Cyber insurance also continues to expand, with global premiums expected to reach $16.6 billion in 2025, reflecting heightened demand for risk transfer solutions in an increasingly digital economy.

Key Trends and Challenges

· Climate and Catastrophe Risks: Natural catastrophe losses remain elevated, with insured losses exceeding $100 billion globally for a fifth consecutive year. This has prompted insurers and reinsurers to recalibrate pricing and coverage, particularly in regions prone to severe weather events.

· Regulatory and ESG Pressures: Regulatory scrutiny is increasing, especially around climate risk, data management, and capital adequacy. In the UK, the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) are pushing insurers to enhance climate risk identification, modelling, and adaptation strategies.

· Technological Disruption: The rise of algorithmic underwriting, digital distribution, and new operating models is transforming how insurers operate, with a new generation of “enhanced underwriters” leading innovation at Lloyd’s and beyond.

· Alternative Risk Transfer: Interest in parametric insurance, captives, and long-term agreements is growing as clients seek to future-proof their risk programmes and manage volatility.

The UK Market in a Global Context

The UK insurance market mirrors many global trends but faces its own set of challenges and opportunities. The market has benefited from the global softening, with increased capacity and more buyer-friendly conditions in most lines, though property and casualty risks with US exposure remain more difficult. Regulatory focus on climate resilience and adaptation is particularly acute in the UK, with insurers expected to take a proactive stance on climate risk management, data quality, and capital allocation.

UK insurers and brokers are also at the forefront of digital transformation, adopting AI and data-driven tools to enhance underwriting accuracy, improve customer experience, and drive operational efficiency. The UK’s strong position in the global reinsurance market, supported by robust capitalisation and a favourable investment environment, further underpins its resilience.

The Future of Construction Insurance The construction insurance sector faces a dynamic future shaped by both opportunity and complexity. As infrastructure investment accelerates globally, driven by government stimulus and the urgent need for climate-resilient buildings, demand for specialist construction insurance products is on the rise. Insurers are responding by developing innovative covers that address evolving risks such as supply chain disruption, labour shortages, and the adoption of new construction technologies, including modular building and sustainable materials. Advanced data analytics and AI-powered risk assessment tools are increasingly being integrated into underwriting processes, enabling more precise pricing and proactive loss prevention. However, heightened regulatory scrutiny, particularly around health and safety, environmental impact, and project delays, continues to challenge insurers and insureds alike. In the UK, the Building Safety Act and ongoing reforms are prompting a renewed focus on risk management, transparency, and collaboration across the construction value chain. Looking ahead, the construction insurance market is expected to remain competitive yet cautious, with insurers prioritising resilience, sustainability, and digital innovation to meet the complex needs of the sector.

Looking Ahead to 2026

As the insurance industry looks to 2026, several key themes are set to shape its future. Sustained growth is anticipated, with global insurance premiums forecast to rise at an above-trend rate, led by strong performance in life insurance and steady expansion in non-life sectors as market cycles stabilise. Continued innovation will be driven by the accelerated integration of AI, embedded insurance, and digital platforms, opening new avenues for growth and transforming distribution models. Heightened risk awareness will see insurers refining their approaches to climate, cyber, and other emerging risks, utilising advanced modelling and

scenario analysis to enhance resilience. Meanwhile, ongoing regulatory evolution—particularly regarding ESG and climate adaptation—will require insurers and brokers to remain agile and proactive to ensure continued compliance and competitiveness., will require insurers and brokers to remain agile and proactive in compliance.

Conclusion

In 2025, the global insurance market is stable, innovative, and increasingly customer-centric. For the UK market, aligning with global trends, while responding to local regulatory and risk factors, will be essential for brokers and underwriters seeking to remain competitive. As the industry moves towards 2026, those who embrace digital transformation, robust risk management, and regulatory foresight will be best positioned to capitalise on the opportunities ahead.