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European insurers seen sustaining profitability into late 2026
S&P Global Ratings expects investment income to rise gradually even as insurers keep moving out of lower-yield bonds bought before 2022.
European insurers are expected to maintain solid profitability through the remainder of 2026 despite subdued growth, according to S&P Global Ratings.
The ratings agency said investment income is gradually improving, but returns remain constrained as insurers replace lower-yielding bonds purchased before 2022.
S&P Global Ratings added that the sector’s credit outlook is supported by disciplined underwriting, conservative investment strategies, and what it called material capital surplus, which it said should help insurers weather risks such as inflation and market volatility.
The report also flagged diverging regional trends, including spreading pricing pressure in commercial insurance across continental Europe and the possibility that fewer large natural catastrophe losses in the first half of 2026 could increase reinsurance pricing pressure. It said the Middle East conflict is unlikely to have a meaningful direct impact on European insurers, citing limited reliance on physical goods and insulation from oil price moves.