Fitch Ratings’ outlook for the EMEA insurance sector is “neutr
al” for 2026, as Fitch expects the underlying operational and business conditions to remain mostly unchanged, compared to those in 2025.
Core credit drivers trend in different directions but overall leave a balanced view. We, therefore, expect sound credit
fundamentals in 2026 for the sector, characterized by strong capitalization and robust profitability.
In European non-life insurance, we expect price increases and rev
enue growth to decelerate across most segments. Persistent underwriting discipline, combined with high investment yields and cost focus will support steady operating profits.
The London Market stands out with a “deteriorating” outlook, reflecting – as for global reinsurance – a
pick-up in competition, leading to a sharper rate softening than elsewhere, which could erode underwriting margins, albeit from strong levels.
In European life insurance, we expect steady net inflows into savings and retirement products, reflecting custom
ers’ caution amid heightened macroeconomic uncertainty. Technical margins, still supported by high long-term sovereig
n yields and steady fee income, underpin a strong profitability outlook across Europe.
Potential investment losses from falling asset values and rising defaults, and non-life prices lagging claims i
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nflation are key risks. Non-life prices could soften more than anticipated, while weaker investor sentiment in life could w
eigh on revenue growth. Slow climate risk mitigation, declining insurability, and related higher earnings volatility also build risks.
Non-Life: Slowing Revenue Growth, Resilient Margins
Fitch expects weak but steady GDP growth in the eurozone and the UK, and slower price increases in most markets, w
hich will limit revenue growth. Property/casualty (P/C) pricing cycles remain uneven: in personal lines, the UK is furthest through the cycle, with rates improving aga
in in motor. Germany was the last to align pricing with inflation to restore margins. Following this normalization, we revised the sector outlook for German non-life to “
neutral” from “improving.” In commercial lines, we expect rates to continue softening from a high base amid inten
sive competition, pressuring margins and supporting a “deteriorating” outlook for the London market, as for global reinsurance.
We expect broadly stable, healthy underwriting margins, as most European non-life insurers should be able to raise tariffs in 2026 to sufficiently offset steadily rising claims inflation. Cost reductions, including AI-driven efficiencies and digital process automation, will support operating margins. Despite some alleviation from lower reinsurance costs, the retention of high-frequency natural catastrophe risk remains high.