Global multiline insurers (GMIs) are expected to report stable profits or a low single-digit increase in profits in 2025, compared with 2023-2024, S&P revealed in a recent report.
“We anticipate aggregate earnings of $65 billion-$75 billion over 2025-2026. This reflects the positive growth outlook in our base-case scenario and underscores insurers’ potential for sustained financial performance,” said S&P credit analyst Marc-Philippe Juilliard
The 15 S&P-rated GMIs reported aggregate net earnings of $68.1 billion in 2024. This constitutes an increase of 8% from 2023, or 15% excluding exceptional items.
“GMIs’ strong earnings resulted from several strategic initiatives, including a focus on profitable underwriting, inflation-adjusted pricing, conservative investment portfolios, and the strategic use of reinsurance,” Juilliard explained.
The report also noted that the integration of technology further enhanced productivity. The gradual integration of generative artificial intelligence technology into underwriting, policy management, and other areas that have been observed are being integrated by GMIs could further improve long-term efficiencies.
Even though S&P predicts stable profits in 2025, it also warns that GMIs could face net earnings pressure from geopolitical uncertainty, which could increase financial market volatility and inflation in the United States.
Additionally, heightened geopolitical uncertainty, financial market volatility, illiquid investments, strong reliance on reinsurance and unfavourable regulatory trends could also undermine GMIs’ profit margins in 2025.
Talking about property and casualty (P&C), the report stated that these activities benefited from strong underwriting results and volume growth.
Analysts noted that even though combined ratios in personal lines improved, pricing adjustments take longer to materialise than in commercial lines.
Regarding Life, operation earnings increased materially in 2024. However, the anticipated market volatility in 2025 could significantly impair GMIs’ short-term profitability.
S&P also expects increased shareholder returns in 2025. Over the past few years, dividend payout ratios were high at 50%-60%, with many GMIs buying back shares for significant amounts, a trend that is expected to continue.