Global insurers delivered strong premium growth and improved profitability in 2025, but the industry's gains are largely cyclical and mask structural challenges that remain unresolved, according to new research from Bain & Company.
Bain's Global Insurance Report, titled Strong Momentum in Insurance, but Structural Challenges Remain, found that global premiums reached an estimated $7.1 trillion in 2025, up from $6.7 trillion in 2024 and more than double the $3.6 trillion recorded in 2010. Premium growth is expected to exceed the prior decade's pace in every region except South America, and across property and casualty, life and health lines.
Profitability also improved, particularly in property and casualty, helped by rate increases and a relatively benign year for catastrophe losses.
That dynamic shows up differently across regions, but the underlying caution is the same. In the US, private P&C insurers posted an estimated net underwriting gain of about $63 billion for full-year 2025, with the combined ratio improving to 92.9%, its lowest level in over a decade, according to Verisk and the American Property Casualty Insurance Association.
Verisk's Saurabh Khemka attributed the result to unusually low catastrophe losses, noting hurricane-related claims fell nearly 90% due to limited US landfall activity rather than reduced underlying exposure.
In Asia-Pacific, Allianz Research's Global Insurance Report 2026 recorded P&C premium growth of just 4.0% in 2025, below the region's ten-year average, as Fitch flagged narrowing underwriting margins from rising loss ratios in motor and health lines in markets including Korea, Indonesia and Australia. North America's own P&C growth slowed sharply too, decelerating from 9.7% to 2.2% even as underwriting profit improved, according to the same Allianz data, underscoring that stronger margins and slower growth are often two sides of the same cyclical coin rather than a sign of structural strength.
Insurance penetration remains low or under pressure in key markets, affordability is strained, and investors continue to question whether insurers can generate durable earnings growth once the current cycle fades.
The protection gap is starkest in Asia-Pacific, where only around one-tenth of natural catastrophe losses are insured, compared with roughly a quarter in Europe and closer to half in North America, and where Swiss Re estimates the region's mortality protection gap at around $132 billion, a figure still widening.
In the US property market specifically, that same affordability strain is visible in home insurance premiums, which are set to climb for a fifth consecutive year in 2026, with the national average projected to break $3,000 for the first time, according to Insurify's 2026 report.
Andrew Schwedel, partner in Bain's global financial services practice and lead author of the report, said insurers should enjoy the current momentum without mistaking it for structural advantage.
"The industry's next phase of value creation will depend on whether insurers can lower the cost of risk, by preventing losses, expanding access to advice and coverage, improving productivity with AI, and using capital more efficiently," Schwedel said.
Insurers worldwide are accelerating investment in data, technology and AI, but Bain found these investments have not yet delivered meaningful operating leverage industry-wide.
Direct written premiums doubled over the past decade globally, while expense ratios fell by just one percentage point. A nearly 50% decline in hiring among the 30 largest insurers in North America and Europe since 2022 may be an early signal of future cost efficiency, though Bain cautioned that real productivity gains will require more than headcount reduction.
Reinsurance has also outgrown the broader industry globally, posting 28% premium growth from 2019 through 2024, compared with 24% for the industry overall, as the value chain becomes more fragmented and profit pools more contestable everywhere from London to Bermuda to Asia's fast-growing markets.
Taken together, the gap between the US and Asia-Pacific's very different growth and margin stories, and the protection gaps each still carries despite them, is exactly the tension Schwedel's four levers are meant to address.
Whether insurers anywhere can convert 2025's cyclical strength into a genuinely lower cost of risk, rather than simply favorable timing on catastrophe losses, is likely to determine whether the industry's next strong year reflects real structural progress or another turn of the same cycle.
