Some pricing and competitive pressures will arise, alongside weak economic growth and volatile financial markets, but robust underwriting and new business generation, high reinvestment yields, and strong capitalisation will support insurers.
Stockholm/Paris/London: The ‘neutral’ outlook for the EMEA insurance sector in 2026 reflects stable operational and business conditions, said Fitch Ratings.
Some pricing and competitive pressures will arise, alongside weak economic growth and volatile financial markets, but robust underwriting and new business generation, high reinvestment yields, and strong capitalisation will support insurers.
Steady net inflows into savings and retirement products should reflect life customers’ caution during the heightened macroeconomic uncertainty.
The ‘neutral’ Italian life sector outlook (previously ‘improving’) reflects stabilising net inflows. Technical margins, supported by high long-term sovereign yields and steady fee income, will underpin strong profitability.
“We expect price increases and revenue growth to decelerate for most non-life sectors. Underwriting discipline, high investment yields and cost reductions will support steady operating profits,” said Fitch.
The London Market’s ‘deteriorating’ outlook reflects – as for global reinsurance – increased competition, leading to a sharper rate softening than elsewhere, which could erode underwriting margins from strong levels.
“Our revision of the German non-life sector outlook to ‘neutral’ from ‘improving’ reflects our expectation for stable profitability on slower premium growth,” stated Fitch.
Capitalisation will remain strong, supported by sustained earnings and providing sufficient headroom to absorb financial market volatility, rising defaults and large losses.
Potential investment losses from falling asset values and rising defaults, and non-life prices lagging claims inflation are key risks. Non-life prices could soften more than anticipated, while weaker investor sentiment in life could weigh on revenue growth. Slow climate risk mitigation, declining insurability, and related higher earnings volatility also build risks.
This year, Fitch introduced outlooks for selected emerging-market EMEA countries. Credit drivers, including sector maturity, vary by country.
Most have generally stable conditions, but Saudi Arabia’s ‘improving’ non-life outlook reflects our expectation of price corrections, leading to improving underwriting profitability in 2026 from a weak base in 2025.