Swiss Re: AI Investment and Geopolitical Shifts Reshape Global Insurance Outlook for 2026 – ProgramBusiness

Global insurance premium growth is expected to slow in 2026 as geopolitical tensions, supply chain disruptions, and inflation weigh on the economy, according to Swiss Re Institute’s latest sigma report, World Insurance in 2026: Shock Absorbers in a Fragmenting World. At the same time, the report says investment in artificial intelligence infrastructure is creating new demand for insurance and risk transfer solutions.

Swiss Re Institute forecasts total global insurance premium growth of 1.3% in real terms in 2026, down from 3.9% in 2025. The report projects that global inflation will average 4.0%, while global GDP growth will slow to 2.5%.

Supply Shocks Reshape the Global Economy

According to the Swiss Re Institute, the latest conflict in the Middle East represents the fourth major global supply shock in six years, following the pandemic, the global energy crisis, and trade disruptions.

The report says governments are increasingly prioritizing national security, strategic autonomy, and supply chain resilience over economic efficiency. As a result, companies are shifting from “just-in-time” supply chains toward “just-in-case” strategies by reassessing suppliers, logistics routes, and geopolitical exposures.

Swiss Re Group Chief Economist Jérôme Haegeli said geopolitical risk has become a structural feature of the global economy. He added that investments in AI infrastructure, energy systems, and more resilient supply chains are creating new pools of risk that require insurance support and pricing.

AI Infrastructure Drives New Insurance Demand

While supply shocks are slowing economic activity, Swiss Re Institute says investment in AI infrastructure is providing an offset.

The institute estimates that hyperscalers’ capital expenditures on AI will reach USD 750 billion in 2026. Those investments are expected to contribute about 0.2 to 0.3 percentage points to U.S. economic growth.

According to the report, expanding investment in data centers, energy infrastructure, and advanced manufacturing is increasing demand for property, engineering, cyber, liability, and business interruption insurance.

Ivan Gonzalez, CEO of Swiss Re Corporate Solutions, said some of the largest AI data centers now have asset values exceeding USD 20 billion before technology installation. He said these facilities pose significant construction, operational, and accumulation risks that require solutions that combine traditional insurance, risk engineering, alternative risk transfer, and financing.

Non-Life Growth Slows as Pricing Softens

Swiss Re Institute expects global non-life insurance premiums to grow 0.6% in real terms in 2026, well below the long-term compound annual growth rate of 3.6% recorded from 2015 through 2024.

The report says advanced markets are expected to drive the slowdown, while emerging markets remain relatively resilient.

Although the underwriting cycle has entered a softer phase, Swiss Re Institute says rising claims inflation, geopolitical uncertainty and increasing catastrophe exposures are likely to limit the depth of the downturn. The report notes that prolonged inflation could increase repair, replacement, and liability costs, partially offsetting downward pricing pressure.

The Swiss Re Institute forecasts that non-life insurers will remain profitable, with return on equity declining from 14% in 2025 to 11.4% in 2026 and to 7.7% by 2028. The report says elevated investment returns continue to support profitability.

Life Insurance Remains Strong

The Swiss Re Institute projects that global life insurance premiums will increase by 2.3% in real terms in 2026, exceeding the long-term trend.

According to the report, higher interest rates continue to support savings and annuity business. Emerging markets are also expected to benefit from favorable demographics, regulatory reforms, and rising insurance penetration.

The institute adds that higher reinvestment yields continue to support investment income, contributing to a positive profitability outlook for life insurers.

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