Istanbul:The global insurance sector demonstrated remarkable resilience in 2025, exhibiting strong profitability and premium growth despite facing significant challenges from geopolitical uncertainties, extreme weather events, and cyber threats. The sector's real premium growth was noted in most jurisdictions, as per a recent OECD report.
According to Anadolu Agency, the OECD's Global Insurance Market Trends 2026 report, published on November 2, highlighted that the insurance industry saw robust growth in both life and non-life insurance markets. Profitability continued to rise, with total insurance penetration across OECD countries increasing to an average of 6.6% of GDP in 2025, up from 6.2% in 2024. Non-OECD reporting countries also experienced a rise in penetration, from 3.7% to 4.2% over the same period.
The report indicated a slight decline in life insurance penetration, while non-life insurance penetration grew over the last decade. In contrast, non-OECD countries experienced an increase in life insurance penetration, with non-life penetration remaining stable. Lower-middle-income countries reported a low total insurance penetration of 0.7% of GDP, compared to 6.7% in high-income jurisdictions.
Non-life insurance saw continued growth, driven by pricing adjustments to compensate for higher claims costs, particularly in auto and health insurance segments. Despite cost pressures from rising healthcare spending and losses from extreme weather events, underwriting performance remained strong, with 34 out of 39 jurisdictions reporting a combined ratio below 100%, indicating underwriting profitability.
Life insurance markets also witnessed strong growth, with premiums increasing nominally by 8.7% and in real terms by 4%. Investment-linked products, favorable financial conditions, pension reforms, and occupational pension expansions fueled this growth. However, real investment returns were mixed due to inflation, rising interest rates, and varied portfolio structures.
Overall, the insurance sector's profitability remained robust, with a return on equity averaging 16.7% in the life sector and 15.7% in the non-life sector. Global reinsurance capital reached a record $785 billion, bolstered by a 45% increase in catastrophe bond issuances.
Despite the profitable year for leading insurers, with a 19% return on equity, the global risk outlook remained challenging. Climate-related risks and cyber threats were among the primary concerns, with the cyber insurance market growing to an estimated $15 billion. Insured losses from natural disasters decreased from $137 billion in 2024 to $107 billion in 2025, against economic losses of $220 billion, down from $318 billion. The report underscored the ongoing significance of climate-related risks and geopolitical developments for the insurance industry.