Global broking business, Brokerslink, has published a new report produced by Swiss Re Institute for its annual global conference, held last month in Madrid.
The report, titled “Underwriting a fractured world”, examines how shifting trade dynamics, new tariffs, and the growing trend of geoeconomic fragmentation are reshaping the global risk landscape and the implications for the insurance industry.
According to Swiss Re’s analysis, while the short-term effects of recent US trade tariffs on primary insurance premiums are expected to remain contained, the broader and more persistent challenge lies in the longer-term structural impacts of global geoeconomic fragmentation. Even if the US and China have reached a temporary truce on trade tensions through to next year, the greater reordering of global trade flows will continue in the years ahead.
Swiss Re estimates that a US effective tariff rate of 15% could trim global Property & Casualty premium growth (defined here as volume and price combined) by around 0.7 percentage points and Life premium growth by 1.2 percentage points between 2025 and 2027 relative to original tariff rates at 2024 levels. This is based off sensitivity analysis of premium growth to GDP growth. In the US, inflationary pressures linked to higher import costs are expected to drive up claims, particularly for property and motor insurance. Outside of the US the report notes that inflation and claims impacts are likely to remain contained, and in some regions like Europe, even contribute to a moderation in inflation rates.
The report also highlights that rising geoeconomic fragmentation, i.e. the growing divisions and potential restrictions on free capital flows between economic blocs poses deeper longer-lasting implications. This fragmentation, the report warns could limit international risk diversification and ultimately raise the cost of insurance, and possibility even curtailing insurability of peak risks. Political fragmentation also reduces international cooperation on mitigating critical global risks, such as climate change, pandemic and cyber risks, increasing global exposures. Society ultimately bears the cost of fragmentation as firms and individuals could have less insurance coverage, keeping protection gaps wide.
However, the report also points to new growth opportunities for insurers. As global uncertainty rises, demand for insurance protection is increasing. The Cyber market is forecast to experience double-digit growth, driven by heightened geopolitical tension and ever greater digital exposure also through AI transformations. The shift towards re-industrialisation for greater strategic autonomy as well as energy transition will also create significant demand for commercial and specialty insurance.
José Manuel Fonseca, President and CEO of Brokerslink, said:
“This excellent report from Swiss Re Institute offers a new and compelling view of both the challenges and opportunities facing the insurance industry in today’s increasingly fractured world. The insights are a testament to Swiss Re’s analytical depth and expertise and I would like to thank them for partnering with us to deliver such valuable perspectives at our global conference.”
Download the report
The document is available in three versions — English, French, and Spanish — and you can download them here.
Just click the version you want:
