Swiss Re predicts 3% higher mortality by 2033, steady growth for life insurers in 2025

Paul Murray, CEO of Life & Health Reinsurance at Swiss Re offers his perspective on the key themes likely to shape life and health insurance and reinsurance in 2025.

Drawing on Swiss Re’s expertise, Murray emphasises the importance of thoughtful forecasting and proactive strategies in navigating the future.

Forecasting the future is no easy task, a reality underscored by history. Murray references tech pioneer Robert Metcalfe, who infamously predicted in the 1990s that the internet would “soon go spectacularly supernova and in 1996 will collapse.”

Despite the risks of being wrong, Murray believes forecasting remains critical for insurers and reinsurers, helping manage risks, uncover opportunities, and guide long-term strategies.

“Diligent, data-driven forecasting helps us set expectations, guide decision-making, identify risks and opportunities—and provides a compass to recalibrate, should things develop differently than anticipated,” Murray explains. “There’s always that tension between the actual versus the expected.”

Murray highlights that 2025 promises steady growth and strong profitability for life insurers. He attributes this to higher fixed-income yields following inflation-driven monetary policy changes during the COVID-19 pandemic, which sparked unprecedented demand for annuity products.

In Murray’s view, life insurers will continue to experience steady growth in 2025—though not the decade-high levels of the previous year, but still exceeding historical averages.

“One change we will likely see is a shift from fixed-rate annuities toward indexed products, not only in countries like Italy and France where demand is already strong but also in the US as normalising monetary policy supports a pivot,” Murray observes. “With fixed income yields still robust, life insurers’ 2025 profitability prospects are intact.”

Another key trend Murray identifies is the continued de-risking of pension schemes. Higher interest rates have strengthened defined-benefit pension funding, while ageing populations present new longevity risks.

“For years, Swiss Re has been a strong partner for life insurers on longevity risk transactions, helping clients in Asia, Australia, Europe, the UK, and the US achieve goals including improving solvency ratios as regulatory frameworks change,” Murray shares. He also anticipates the UK’s Solvency II reforms and IFRS transitions to create further opportunities for reinsurers to assist life insurers with balance sheet optimisation and growth.

Mortality trends remain a focus for Swiss Re, Murray shares. The company’s recent analysis highlights lingering excess mortality caused by COVID-19, which could keep rates elevated in the US and UK until 2033. However, he is cautiously optimistic about a turning point in 2025.

“We’ve raised concerns about plateauing longevity gains, as factors like rising rates of obesity and diabetes conspired to slow progress in key insurance markets even before COVID-19 hit,” Murray notes. “And while the pandemic has passed its acute phase, we are still living with its consequences. Swiss Re recently published a report highlighting how COVID-related excess mortality in the general population could be up to 3% higher than pre-pandemic levels in the US and 2.5% higher in the UK by 2033.”

With stronger healthcare systems, better disease prevention, and emerging treatments like GLP-1 drugs, Murray is hopeful about the future: “I personally am cautiously optimistic that 2025 could be the year in which we start turning the corner on reinvigorating mortality improvement. It would certainly be gratifying to say in 12 months’ time that my hunch was correct, since this would mean improving prospects for people to live longer, healthier lives.”

Murray emphasises that reinsurers must do more than just predict the future—they must actively shape it. This involves leveraging favourable market conditions, addressing demographic and regulatory shifts, and staying vigilant against public health risks.

“For 2025, this means putting attractive market conditions to work to support retirement savings products and industry profitability; recognising opportunities that accompany changing demographics and regulatory developments; and staying watchful for threats to public health that only a few years ago might have seemed remote,” he concludes.

Before signing off, Murray recalls Metcalfe’s humorous acknowledgment of his forecasting error—blending and drinking his own words after the internet thrived. With his own predictions for 2025 now outlined, Murray quips, “Once 2025 winds down, let’s see how I did with my own forecasts. I’ve got the blender ready, just in case.”

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