Resilient business conditions across most insurance markets have continued in the face of mounting pressure from the US–Iran war, weaker economic growth, higher inflation, and rising government bond yields, leading Fitch Ratings to remain ‘neutral’ on the global insurance sector as of mid-year 2026.

The ratings agency’s global insurance sector outlook is in accordance with its base-case expectations following the start of the Iran war.

Fitch does warn that muted volume growth and slightly higher claims inflation are likely to add pressure to non-life underwriting margins, particularly in commercial lines, where pricing has started to soften.

For life insurers, heightened investment yields and steady long-term savings trends are likely to largely make up for modestly higher lapse rates and weaker new business, according to Fitch.

The ratings agency explained that late-cycle market and credit risk remain a key downside for carriers, although most insurers maintain high-quality, diversified portfolios consistent with their generally prudent investment risk appetite.

Harish Gohil, Global Head of Insurance, Fitch Ratings, commented, “Fitch Ratings expects the global insurance sector to be fairly resilient to the heightened risk scenarios following the start of the Iran war. Some non-life insurance sectors show a slight tilt towards ‘deteriorating’, reflecting their greater exposure, relative to life insurers, to inflation risks and weak economic growth.”

For the global reinsurance and the UK London market, Fitch has maintained a ‘deteriorating’ outlook, noting that the softer pricing cycle is starting to be felt more acutely.

Additionally, the US health sector outlook remains ‘deteriorating’, as Fitch expects that margin recovery is unlikely to be material in 2026.

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