Allianz Global Insurance Report 2025: Rising demand for protection

Allianz Research today published its latest “Global Insurance Report”, which analyzes developments in insurance markets worldwide.

According to the report, the global insurance industry is estimated to have grown by +8.6% in 2024. This again exceeded the exceptional +8.2% growth recorded in the previous year. Insurance companies worldwide experienced an increase in premiums of EUR 557 billion, bringing total premium income to EUR 7.0 trillion. Life insurance remained the largest segment with premium income of EUR 2,902 billion, followed by P&C insurance (EUR 2,424 billion) and health insurance (EUR 1,682 billion).

Growth in P&C insurance was +7.7% last year, slightly lower than in the previous year (+8.3%). It is worth noting that growth was mainly driven by the largest market, North America, where premium income increased by +8.2%. More than half of the world's premiums are written in this region. While premium income in Western Europe increased by +6.0%, the Asian market was less dynamic, growing by only +4.0%. It is therefore still smaller than its Western European counterpart.

Life insurance grew by +10.4% in 2024, outperforming the other two segments and also growing faster than in 2023 (+8.2%). The main driver was once again North America, which grew by an astonishing 14.4%. With interest rates reaching new highs, there was a run on annuities. Higher interest rates also led to an increase in premium income in Western Europe (+7.1%). In Asia, most markets showed strong growth, led by China with a growth rate of +15.4%. In contrast to the US dominance in P&C insurance, global market shares in life insurance are relatively evenly distributed. Asia (including Japan and China) leads with more than a third of premiums.

Health insurance grew by +7.0%. Demand remained very strong, particularly in Asia (+12.6%). This reflects the still low insurance penetration (premiums in % of economic output) in the region, which is below 1% in all markets except Taiwan. Even more than in life insurance, demand is driven by the state of the social security system, i.e. the level and quality of public healthcare.

Geopolitical uncertainties and trade tensions may weigh on insurance volumes through weaker economic growth, trade slowing down and higher credit and market risks. On the other hand, a protection effect could also be visible as companies demand more risk management solutions in this uncertain and crisis-ridden environment. In the longer term, financial fragmentation and weakening international cooperation including on climate, cyber or pandemic preparedness could increase the cost of insuring these risks.

Asia (excluding Japan) achieved solid growth of +9.3%. However, the contribution of the different segments was rather uneven: While the life and health segments grew healthily at +11.4% and +9.1% respectively, the P&C segment showed more restrained growth at +4.5%. Total premium income stood at EUR 1.4 trillion in 2024. This means that one in five euros of global premiums are written in the region. China (excluding Hong Kong) is by far the biggest market, accounting for more than half of all premiums (EUR 754 billion), followed by South Korea (EUR 232 billion) and India (EUR 140 billion). Looking at the different segments, the picture is quite heterogeneous: Life insurance dominates Asia, accounting for 63% of total premiums (EUR 882 billion). With a global market share of 30.4%, Asia has overtaken North America (29.8%) and Western Europe (29.1%) to become the largest market worldwide, albeit by a narrow margin. On average, insurance penetration is 3.1%, which is higher than in the USA (2.8%) and many European markets, such as Germany (2.2%). The Asian P&C market is much smaller, with a premium income of EUR 354 billion. Its global market share is less than 15%, and penetration is low at 1.2%. Health insurance remains the smallest segment, accounting for EUR 167 billion.

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 Asia (excluding Japan), overall growth is expected to be +7.5% (nominal GDP: +6.3%). For P&C, we expect annual growth of +4.5% up to 2035 (Asia ex Jap: 6.5 %). 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 +5.0% thanks to higher interest rates. Asia and China remain the growth engines, driven by the need for private provision in the face of accelerating demographic change (Asia ex Jap: 7.5%). The smallest segment, health insurance, should remain the most dynamic, with annual growth of +6.7%. Asia in particular still has a lot of catching up to do (Asia ex Jap: 9.2%).

In absolute terms, the global premium pool will grow by EUR 5,319 billion over the next ten years. Most of this growth will come from life insurance (EUR 2,055 billion). More than half of this additional premium pool will be generated in Asia  (excluding Japan) (EUR 1,071 billion), more than in North America (EUR 416 billion) and Western Europe (EUR 351 billion) combined. In P&C insurance, around 40% of the additional premiums of EUR 1,522 billion will come from North America. In health insurance, we expect additional premiums of EUR 1,743 billion, most of which will come from the US market.

"Insurance remains a growth industry," said Ludovic Subran, Chief Economist at Allianz. "However, this growth is largely fueled by policy inaction: underinvestment in adaptation is leading to increasing climate damage, while delayed pension reforms are requiring higher savings efforts from individuals. In the long term, however, the private insurance industry cannot shoulder the burden of acting as society's "repair shop". Only by working together will we be able to meet the major challenges of the "twin transformation".”