Credit rating agency Fitch Ratings states that the broader EMEA insurance landscape enters 2026 on a steady footing, supported by reliable operating performance, firm capitalisation and continued momentum in new business generation.
Fitch notes that savings and retirement inflows continue at a measured pace, largely because customers have become more cautious in the face of ongoing macroeconomic uncertainty.
In Italy, this shift has translated into a ‘neutral’ outlook for life insurance after a period of improvement, with profitability underpinned by firm sovereign yields and consistent fee-driven income.
Across non-life markets, Fitch anticipates a slower rise in premiums compared with recent years as the pace of repricing begins to settle. Even so, underwriting discipline, favourable investment returns and cost-efficiency measures are expected to help sustain solid operating profits.
Germany’s non-life sector has also been adjusted to ‘neutral,’ reflecting Fitch’s view that profitability will remain stable despite moderating revenue growth. In France, the insurance sector remains resilient, benefiting from disciplined underwriting and robust investment returns, while macroeconomic volatility and competitive pressures persist.
The London Market faces a deteriorating outlook, driven by sharp rate softening amid rising competition, which Fitch expects could further pressure margins. Combined ratios are expected to edge higher, although premium volumes should still rise modestly as additional capital, both traditional and alternative, continues to flow into specialty lines.
Favourable investment performance provides some offset, while ongoing modernisation programmes across the market remain central to achieving long-term efficiency. Fitch draws attention to the rising frequency of mid-range natural events, which complicates modelling and annual earnings patterns.
The agency highlights that strong sector-wide capital provides a buffer against asset volatility, credit losses, and major insured events. Nonetheless, falling asset values, rising defaults, and premiums lagging claims inflation pose notable risks. Investor caution could also weigh on life-sector revenue, while climate-related exposures may increase earnings volatility and challenge long-term insurability in parts of the region.
Customer behaviour across western Europe has shifted toward greater interest in protection, retirement planning and stability-oriented savings products. Competitive pressure is strong, and insurers are investing heavily in technology upgrades, data systems and regulatory compliance.
These efforts elevate cost bases in the near term but are considered essential to long-term competitiveness and risk management. Fitch notes that supervisors are increasingly focused on transparency around credit exposure and valuation methods as companies expand into less liquid assets.
Within the Netherlands, Fitch observes that both life and non-life insurers move into 2026 with stable fundamentals. The transition of the national pension system toward a defined-contribution structure is generating increased demand for flexible retirement arrangements, including products that facilitate gradual income withdrawals and asset transfers from legacy schemes.
Dutch life insurers still rely significantly on legacy portfolios and strict cost management. Mortgage and property loans remain central to their investment books, although Fitch highlights consistently low arrears and strong performance in stress scenarios. In non-life, concentrated market structure supports disciplined pricing. Weather-linked claims have become more frequent, but reinsurance continues to absorb extreme volatility.
In the United Kingdom, the life sector preserves a firm outlook. The agency expects the flow of bulk annuity transactions to remain strong, even as intense competition places pressure on margins. Retail and workplace savings also continue to expand, driven by increasingly sophisticated digital platforms.
Capital strength across the sector is healthy, though Fitch Ratings anticipates a modest reduction as firms raise their allocations to private credit and other long-dated assets. Regulatory teams are paying close attention to asset valuations, liquidity oversight and funded reinsurance structures, with forthcoming stress-test outcomes expected to guide supervisory focus through 2026.
For UK non-life insurers, Fitch expects pricing in motor to rise after reductions in 2025 left margins tight. Elevated claims costs tied to repairs, theft and parts availability remain persistent. Home insurance appears to be normalising after varied pricing shifts, but profitability is still delicate and vulnerable to severe weather.
Consolidation remains a defining theme, most visibly illustrated by Aviva’s acquisition of Direct Line Group. Fitch Ratings maintains that scale advantages in distribution, data and cost efficiency favour larger carriers, while investment returns help sustain a stable sector view overall.
Türkiye’s non-life industry remains on a positive growth path, though the pace is moderating as inflation cools. Fitch Ratings believes investment income will once again drive sector profitability, offsetting significant technical deficits, particularly in motor third-party liability where regulated tariffs trail behind claims inflation.
Recent indexation initiatives ease the imbalance but fall short of resolving the fundamental pricing gap. Stronger oversight has improved capital resilience, and Fitch Ratings expects this progress to continue. Earthquake exposures remain largely transferred through the national pooling system and international reinsurance partners.
Kazakhstan continues to experience steady growth across life and non-life activities. Fitch Ratings highlights that life insurance is expanding rapidly due to rising incomes and low market penetration, although competition from bank savings products is strong. The ability for policyholders to move pension annuity assets between providers intensifies rivalry.
Profitability across the sector relies heavily on investment returns, with a strong concentration in government securities that heightens interest-rate sensitivity. Non-life business parallels broader economic trends, though compulsory motor insurance remains only marginally profitable. Fitch notes ongoing regulatory improvements aimed at strengthening capital, oversight and consumer protection.
In Uzbekistan, Fitch describes a sector heavily dependent on investment returns from domestic bank deposits, a structure that enhances yields but reinforces close ties to the banking system. Significant involvement in inward reinsurance and financial-risk policies exposes insurers to potential volatility because many lines lack extensive historical claims data.
Steadily rising capital requirements through 2029 are advancing consolidation, while the newly formed national reinsurer is intended to enhance domestic capacity. The agency expects, however, that the market will continue to rely on international reinsurers for large exposures.
Saudi Arabia heads into 2026 with improving prospects in non-life. Fitch attributes this to strengthening prices in motor and medical lines following a difficult 2025, although profitability remains below earlier levels. Consolidation is accelerating as firms prepare for the forthcoming risk-based capital regime and face tighter supervisory expectations surrounding underwriting controls and governance standards.
These requirements raise administrative costs, but Fitch expects them to build a more resilient market structure. A rule granting domestic reinsurers priority in receiving cessions is reshaping market relationships and contributing to rising concentration.
The United Arab Emirates maintains a stable outlook, with Fitch citing steady pricing in medical and motor lines and growing demand linked to population expansion. Larger insurers benefit from superior technology capability and cost efficiency, while smaller companies continue to face stringent oversight, particularly where solvency issues emerge. Consolidation is therefore likely to persist. Catastrophe risk for local carriers remains limited due to extensive reinsurance use, a pattern reinforced by the severe rainfall that hit Dubai in 2024.
Across Europe, the Middle East and Central Asia, Fitch Ratings concludes that insurers begin 2026 with durable financial strength. Capital remains robust, investment income continues to anchor profits, and reinsurance is essential in managing increasingly variable loss patterns. While challenges differ by market, Fitch Ratings finds that the sector as a whole is positioned to navigate the economic, regulatory and operational forces that will shape the coming year.
Sabine Bauer, Head of EMEA Insurance, added: “EMEA insurers have a neutral sector outlook: some challenges will stem from pricing and competition, but overall strong underwriting and new business, steady interest rates and strong capitalisation will support resilience. Prospects are sound, although trends are diverging in smaller markets.”
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