2026 is shaping up to be a defining year for insurers and their asset management teams. The US-Israel-Iran conflict has injected fresh volatility into public markets, while private assets continue to stand out as a rare source of resilience and yield. With central banks largely on pause and geopolitical tensions unlikely to fade quickly, although some de-escalation is anticipated, investors are gravitating toward income‑oriented, lower‑volatility strategies.
Insurance portfolios face mixed signals: a prolonged low‑rate environment is squeezing investment returns, P&C reinsurance competition is intensifying, and regulatory expectations are rising sharply across regions. Yet 2025 earnings underlined the strength of European insurers, which delivered improved combined ratios, strong ROE, and robust capital returns backed by robust solvency positions and benign catastrophe losses.
For this year, the private credit business is expected to keep its momentum, strategic partnerships and M&A transactions are likely to increase, and insurance companies will increasingly explore high‑growth market niches. At the same time, AI, cyber threats, climate‑driven losses, and operational complexity are reshaping risk priorities and widening the gap between industry leaders and laggards.
Regional divergences are becoming more pronounced—from Europe’s slowing macro backdrop and growing push into private markets and infrastructure, to the GCC’s regulatory transformation. Across all markets, the message is clear: Investment discipline, active risk management, and selective diversification into private assets coupled with operational excellence and accelerated digital transformation will be essential as insurers and asset managers have to navigate through waters shaped by geopolitical risk, regulatory change, and shifting market currents.
The year may remain volatile, but selective opportunities lie ahead. We hope this report provides valuable insights into industry trends, shares our views on the evolving market landscape, and serves as a useful basis for further discussions.
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