Global Insurance Report 2025: The Hunt for Growth
Faced with a volatile global environment, the insurance industry is under pressure to find new sources of profitable growth. McKinsey & Company’s Global Insurance Report 2025, released in November 2024, examines the current state of the personal and commercial property and casualty (P&C) and life insurance sectors, offering insights into strategic opportunities and risk management in a complex world.
Economic Headwinds and Opportunities
The report acknowledges the challenges faced by insurers, including stubbornly high inflation, uncertain interest rates, and geopolitical instability. Despite these headwinds, including shifting trade patterns and rising protectionism, the report identifies significant grounds for optimism. The report is divided into three chapters, covering commercial P&C, personal lines P&C, and life insurance, exploring growth potential in an evolving landscape.
Personal P&C: Identifying Growth in a Challenging Market
While the personal lines P&C insurance sector saw premium growth of 9.5 percent between 2022 and 2023—exceeding global GDP by a half percentage point—the premiums’ share of nominal GDP remained below pre-pandemic levels. The gap in coverage between developed and emerging economies also widened. Growth in developed markets was largely driven by rate increases, suggesting a limited expansion of risk coverage.
Affordability has become a major concern in some markets due to rising asset prices, increasing repair costs, more frequent damage, and the increasing cost of reinsurance. The report suggests this is a crucial moment for innovation in the insurance industry. Areas with potential for growth include several economies in Latin America and Asia, which may enter the economic conditions that would enable growth in insurance coverage and relevance. Additionally, the changing demographics, including an aging global population and evolving consumer behavior, present opportunities for carriers to rethink their offerings and capabilities.
Distribution is also evolving, moving closer to the customer as insurance is increasingly embedded in broader purchases. New mobility models, technology such as AI and generative AI, are also pushing for carriers to rethink their approaches to distribution, pricing, product design, and claims processing.
Commercial P&C: Seeking Growth Beyond Price Hikes
Global commercial P&C lines continue to exhibit robust growth, despite a more recent softening of conditions. Over the past five years, premiums rose by an average of 8 percent annually, while the industry’s average combined ratio trended downward to an estimated 91 percent in 2023. The report states that while rate increases have driven most growth, insurers need to capture consistent, profitable growth in the shifting market landscape.
The report emphasizes that a company’s financial performance is driven more by its operations than its location. While effective portfolio strategy is important, execution matters even more. The report recommends that insurers concentrate on their core business lines to achieve profitable growth.
Life Insurance: Adapting to a Shifting Landscape
The life and retirement insurance industry is experiencing a period of mixed economic signals. While macroeconomic conditions—including global GDP growth, decreasing inflation, and positive equity markets—provided a boost, not all product lines and areas benefited. The report notes that while there were positive factors, the industry is still striving for relevance.
Significant opportunities exist. The life insurance market is being changed by the aging silver population (aged 65 or older) and the concentration of wealth among Generation X individuals and retirees. Changing social norms and living patterns also affect the traditional life insurance model. These changes include fewer marriages, lower fertility rates, and more dual-income households. This presents an opportunity for more flexible life insurance products geared toward nontraditional family structures.
Note: The report is a collaborative effort, representing the views of McKinsey’s Insurance practice.
