Property and casualty premium growth in Australia and globally is moderating as rate rises slow, according to Swiss Re’s latest Sigma report.

The Trump government’s America First trade policy is also affecting the industry, it warns.

“While insurers’ profitability outlook is still benefiting from rising investment income, we expect tariffs to slow global GDP growth, and consequently weigh on insurance demand,” the reinsurer’s chief economist Jerome Haegeli said.

“In the long term, US tariff policy is another move towards more market fragmentation, which would reduce the affordability and availability of insurance, and so diminish global risk resilience.”

In Australia, profitability growth should be driven by further improvements in underwriting results, the report says.

It predicts return on equity for Australia and six other advanced economies (France, Germany, Italy, Japan, the UK and the US) will rise to 9.7% this year and be steady through 2027, with broadly stable underwriting and improving investment results.

“In the near term, advanced markets will likely see steep slowdown in premium growth due to fading price strength,” Swiss Re said. “Despite an anticipated tariff-led growth slowdown and financial market volatility, we believe the insurance industry should remain profitable.”

P&C premium volume in the Australian market reached $98.38 billion last year, up from $89.5 billion in 2023, according to the report.

The paper does not give a forecast for the nation’s premium growth, but it estimates growth across advanced Asia-Pacific economies will moderate to 2.1% this year from 2.9% in 2024.

Globally, premium growth is slowing in the primary non-life insurance sector as pricing softens and government policy uncertainty cuts economic momentum, the report says.

Premium growth of 2.6% in real terms is expected this year, weaker than the 4.7% rise recorded last year, but “higher reinvestment yields should support profits”.