The investment returns earned by insurers in 2025 remained positive in nominal terms in most jurisdictions, although real returns weakened compared with 2024 and were negative in many jurisdictions. Bonds remained the dominant asset class, providing insurers with assets that support asset-liability management and liquidity needs. However, there was also continued interest among insurers in investing in alternative assets, including private credit.
Global Insurance Market Trends 2026
Abstract
Insurers are large institutional investors in financial markets. The premiums they collect are invested, and investment income forms an important part of their overall financial results. In 2025, while investment returns were positive in nominal terms across most reporting jurisdictions, returns in real terms were more mixed, with negative real returns recorded in more jurisdictions than in 2024.
In 2025, positive real investment returns were recorded in 20 of 35 life markets and 24 of 40 non-life markets. Among the same reporting jurisdictions, the share recording positive real returns was lower than in 2024 which were 48% for life markets and 75% for non-life markets (Figure 4.1).
Inflation and the evolution of equity and bond markets explain the variation in real investment returns across jurisdictions. Although inflation moderated in OECD countries in 2025, from 5.2% in 2024 to approximately 4.0%, it remained elevated in several jurisdictions, reducing investment returns in real terms. Equity and bond markets evolved differently during the year. While global equity markets recorded strong gains, slightly higher long-term interest rates, which increased from 3.0% in 2024 to 3.1% in 2025 (OECD, 2026[13]), reduced the market value of existing bond holdings. The net effect depended on the portfolio composition of insurers, with those holding more equities generally faring better in real terms.
Insurers with larger equity allocations generally benefited from the strong performance of global equity markets in 2025. The MSCI World Index rose by 21.1% (MSCI, n.d.[14]). For example, in Sweden, life insurers allocated 45.3% of their investments to equity, well above the average equity allocation of 6.5% for life insurers across all reporting jurisdictions, and recorded a nominal return of approximately 6.0%, above the average across reporting jurisdictions. It should be noted, however, that insurers’ equity exposures may be concentrated in domestic rather than global equities, meaning that developments in global equity markets may not translate directly into investment performance. In Sweden, for example, around 50% of life insurers’ equity holdings consist of domestic equities, meaning that the performance of the Swedish equity market may to some extent have influenced overall returns, alongside other factors such as exchange rate movements. Other factors also had an impact on investment results, including the composition and quality of bond holdings, currency exposures and local inflation dynamics. In jurisdictions where inflation remained elevated, the gap between nominal and real returns was particularly large. In Türkiye, for example, life insurers recorded a nominal return of 10.0% but a real return of ‑18.4%, as the annual inflation rate was 30.9% in 2025.
The rise in long-term interest rates had a particularly notable effect on life insurers, whose portfolios tend to be more heavily concentrated in long-duration fixed-income instruments. When yields rise, the value of existing bonds falls. This pattern is visible in the 2025 data. In several Euro area jurisdictions, life insurers recorded weaker real returns than non-life insurers. Germany recorded a negative real investment return of ‑2.5% in life insurance and a positive 1.2% in non-life, while the Netherlands recorded ‑5.4% in life and -1.0% in non-life. In these jurisdictions, bond allocations were broadly similar between life and non-life insurers. In Germany, life and non-life bond allocations stood at 33.8% and 36.8% respectively, and in the Netherlands at 39.4% and 41.3%, suggesting that the difference in returns could reflect the tendency towards longer durations in life insurers’ bond holdings rather than differences in asset allocation.
In per cent
Note: For more details, please see the methodological notes in Annex B.
Source: OECD Global Insurance Statistics.
Return expectations and the duration of liabilities shape asset allocation decisions. Fixed-income securities can span a wide range of maturities, making them suitable instruments for both life and non-life insurers to match their liabilities and minimise the duration gap. Life insurers tend to hold longer-maturity bonds to match their long-term liabilities, while non-life insurers generally favour shorter-maturity fixed-income securities given the shorter-term nature of their obligations, with a higher allocation to liquid assets such as cash and deposits to meet expected claims payments. Several jurisdictions noted the role of asset-liability management in decisions on investment allocation. For instance, in Chinese Taipei, fixed-income securities were purchased by life insurers to meet long-term liability management needs, while non-life insurers held more liquid assets given their shorter-duration products. Malaysia reported that fixed-income concentrations reflected the dominance of long-duration life and pension liabilities within the Malaysian insurance market.
Reflecting these advantages, bonds continued to account for the largest share of invested assets across life, non-life and composite insurers in 2025. They represented 59.7%, 50.6% and 65.7% of total investments respectively (Figure 4.2). Collective investment schemes played a more prominent role in life insurer portfolios (14.7%) than in non-life or composite insurer portfolios. Cash and deposit allocations were higher for non-life insurers (12.0%), while land and buildings accounted for a small share of total assets for all types of insurers. Compared with 2024, the share of bonds declined modestly across all three insurer types, as did equity allocations among non-life and composite insurers. Cash and deposit holdings increased across all groups, while collective investment schemes accounted for a larger share of non-life and composite insurer portfolios.
In per cent
Note: For more details, please see the methodological notes in Annex B.
Source: OECD Global Insurance Statistics.
Most insurer investments remained concentrated in high-quality fixed income assets, notably government bonds, reflecting a preference for relatively safe investment portfolios with limited credit risk. For instance, Chinese Taipei noted that fixed-income investments were predominantly investment-grade, while Malaysia reported that most bond holdings were concentrated in highly rated corporate and government-backed securities. Ecuador and Latvia similarly highlighted the conservative nature of insurers’ investment strategies, with limited exposure to higher-risk assets. However, some insurers, particularly in the United States and Europe, have been increasing allocations to private credit in search of higher yields (Box 4.1).
Private credit has continued to attract insurer interest as a source of higher investment returns. In an environment where investment-grade bonds offer relatively modest yields, private credit can offer a higher return by lending directly to companies or directly financing projects. These higher returns generally reflect both the additional risks associated with such investments and the generally lower liquidity of private credit instruments. For life insurers with long-term liabilities, some less liquid investments may be acceptable in exchange for a higher yield (Financial Times, 2026[15]).
Private credit carries risks that differ from those of publicly traded bonds. First, private credit positions are not priced continuously in markets and are instead valued using internal models and assumptions. As a result, changes in the credit quality of borrowers may not be immediately reflected in reported portfolio values. Second, if an insurer needs to raise cash quickly to meet claims or respond to elevated surrender activity, private credit holdings may be more difficult to liquidate than publicly traded securities, as secondary markets for these assets are generally less developed and less liquid. Where insurers access private credit through funds, fund-level restrictions on withdrawals, known as “gating”, may further limit access to invested capital in stressed conditions (IAIS, 2025[16]).
In 2025, discussions intensified around the appropriate regulatory response to the growing allocations by insurers to private credit. The US Treasury convened insurance regulators to discuss private credit risks in insurance portfolios (United States Department of the Treasury, 2025[17]). In Europe, European Insurance and Occupational Pensions Authority (EIOPA) called for continued monitoring of private credit exposures among European insurers, highlighting risks related to credit and liquidity risk, valuation uncertainty and hidden leverage (EIOPA, 2025[18]). EIOPA also issued supervisory guidance on the oversight of insurance undertakings acquired by private equity firms, which have been a significant driver of greater insurer investment in private credit (EIOPA, 2026[19]).
Source: EIOPA (2025[18]), Financial Stability Report, https://www.eiopa.europa.eu/publications/financial-stability-report-june-2026_en; EIOPA (2026[19]), Consultation paper on the Supervisory Statement on the authorisation and ongoing supervision of (re‑)insurance undertakings related to private equity, https://www.eiopa.europa.eu/consultations/consultation-supervisory-statement-authorisation-and-ongoing-supervision-re-insurance-undertakings_en; Financial Times (2026[15]), Life and Annuity Industry is Moving into Riskier Assets, https://www.ft.com/content/aa80789e-3c7e-4a51-a968-fbe3fceb1472?syn-25a6b1a6=1; IAIS (2025[16]), Global Insurance Market Report (GIMAR), https://www.iais.org/uploads/2025/12/Global-Insurance-Market-Report-2025.pdf, the United States Department of the Treasury (2025[17]), U.S. Department of the Treasury Hosts Convening with State Insurance Commissioners on Private Credit and the Insurance Sector, https://home.treasury.gov/news/press-releases/sb0493.