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Swiss Re Institute has identified social inflation, geopolitical instability, and natural catastrophes as the top three themes that will shape the re/insurance industry in 2025. According to Swiss Re, US liability claims have increased by 57% in the past decade, with nuclear verdicts becoming more frequent. This trend is expected to continue, with jury awards above US$10 million becoming more common. The rise of social inflation is a major concern for insurers and reinsurers, as it can drive up claims and impact profitability.
In addition to social inflation, geopolitical instability and economic uncertainty are also major factors that will shape the industry in the coming years. Protectionist trade policies, territorial tensions, and other geopolitical factors can lead to higher inflation and potential supply chain disruptions. This will have a direct impact on insurers and reinsurers, who will need to provide support beyond traditional risk transfer to help their clients manage these risks.
Natural catastrophes are another key theme that will continue to impact the industry in 2025. Swiss Re notes that 2024 marked the fifth consecutive year with insured losses exceeding US$100 billion, and there is no sign of this trend abating. As climate change continues to drive more severe weather events, insurers and reinsurers will need to adapt their risk management strategies to mitigate losses.
On the life insurance front, Swiss Re forecasts steady growth in 2025, driven by higher interest rates and the need for protection in an uncertain world. Life insurers will also have opportunities to optimize their balance sheets and support new business growth using reinsurance, especially as many are now gauging the impact of shifting to IFRS.
Overall, the top three themes identified by Swiss Re highlight the need for insurers and reinsurers to be proactive in managing risks and supporting their clients in an increasingly volatile and uncertain world. By providing insights, knowledge, and tools that improve risk awareness and inform effective risk management, the industry can continue to fulfill its purpose of protecting people when they need help the most.