Fitch Ratings has kept a neutral outlook for the EMEA insurance sector in 2026, citing stable operating conditions despite market pressures.
Pricing and competitive pressures are expected, alongside sluggish economic growth and volatile investment markets. Fitch said strong underwriting performance, new business generation, higher reinvestment yields and solid capitalisation should provide support.
Life insurance is expected to see steady net inflows into savings and retirement products as customers remain cautious amid macroeconomic uncertainty. The outlook for the Italian life sector has shifted to neutral from improving, reflecting stabilising net inflows.
Technical margins, supported by high long-term sovereign yields and steady fee income, are expected to underpin profitability, according to the note.
For non-life insurance, Fitch forecast slower price increases and revenue growth. Underwriting discipline, investment yields and cost management are expected to maintain operating profits.
The London market carries a deteriorating outlook due to increased competition and faster rate softening, which could reduce underwriting margins. Meanwhile, the German non-life sector outlook was revised to neutral from improving, reflecting expectations of stable profitability amid slower premium growth.
Capitalisation across the region is expected to remain strong, providing insurers with the capacity to absorb financial market volatility, higher default rates and large losses. Key risks include potential investment losses from falling asset values and rising defaults, non-life pricing lagging claims inflation, weaker investor sentiment in life insurance, and rising earnings volatility from climate-related exposures and declining insurability.
Recent developments indicate additional pressures and opportunities for EMEA insurers. According to Aon, the European insurance market is softening, with price reductions emerging in property and cyber lines due to abundant capacity and competition.
In the Gulf Cooperation Council (GCC), the insurance market is expected to remain stable, supported by economic diversification, infrastructure investment, and compulsory insurance schemes.
Meanwhile, digital transformation continues across the region, with insurers implementing insurtech solutions, artificial intelligence for underwriting and claims, and cloud infrastructure to improve operational efficiency.
Regulatory attention is focusing on emerging risks, including investments in private credit, AI adoption, geoeconomic fragmentation, and climate- and cyber-related exposures, according to the International Association of Insurance Supervisors (IAIS). Mergers and acquisitions activity remains uneven across Europe, with deal volumes rising in the UK, France, Southern Europe, and the Nordics, while Germany and Austria show slower growth.
Fitch has also expanded coverage to emerging-market EMEA segments, where sector drivers vary by country.
Saudi Arabia’s non-life sector was assigned an improving outlook based on expected price corrections and improved underwriting profitability in 2026 following a weak 2025.
