Property and casualty insurers are expected to report improved profitability in 2024, with industry-wide return on equity across eight major markets at 10% so far this year, up from 6% in 2023. ROE of above 10% is forecast into 2025. Non-life premium volume is forecast to build on the 3.9% growth achieved in 2023, reaching £3.5trn in 2024 and £3.7trn in 2025, according to Swiss Re Institute's annual World Insurance sigma report.

Commenting on the findings of the report, Kera McDonald, chief underwriting officer Swiss Re Corporate Solutions said: "Commercial insurance accounts for almost half of the total property and casualty market. We expect commercial P/C carriers to maintain profitability in 2024, as rate trends have enabled lines like property to stay sustainably priced. The industry has seen single-digit rate increases for property business written this year. On the casualty side, we observe a trend of general market softening across most long tail lines."

Geopolitical tensions and higher inflation have led to a high level of economic concern in recent years. Despite this, Swiss Re believes the global economy has remained remarkably resilient, setting the scene for growth and improved profitability across the insurance industry.

Jérôme Haegeli, Swiss Re's group chief economist said the insurance industry has reached a new equilibrium after the challenges of recent years. “The global economy has surprised on the upside, which should drive more demand for insurance,” he continued. “The life sector in particular is one to watch as higher interest rates drive investment income and consumer demand for annuities, giving more people secure retirement incomes."

Swiss Re Institute estimates that global gross domestic product will grow by 2.7% in real terms in 2024, the same as 2023. This resilient growth is expected to continue into 2025 at 2.8% in real terms. While the overall outlook is positive, regions are on different trajectories, with the US forecast to grow at 2.5% in 2024, while the euro area is expected to show below-trend growth of 0.7%.

The trend to global disinflation continues. However, returning to target inflation levels is unlikely to be a smooth journey, the organisation said. In the US, inflation is expected to return to target in 2025, due to higher-than-anticipated core services prices. Europe is already near its target inflation levels, driven by a fall in energy prices in 2023, softer core prices and an expected deceleration in wage growth.

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