Asian insurers and the global insurance industry continue to suffer disruptive supply shocks and barriers to the free flow of goods arising from the Middle East conflict.
This is according to global reinsurer Swiss Re's latest sigma report, "World Insurance in 2026: Shock Absorbers in a Fragmented World".
"The Middle East conflict is the latest such shock, and the fourth in the past six years. Even as trade resumes through the Strait of Hormuz, through which roughly a fifth of the world's seaborne oil flows, the global supply outlook remains fragile."
However, the report says a "counter-current" to the Middle East risk is the global build-out of artificial intelligence, which requires insurance and reinsurance throughout the process amid the rise in the technology's use. Swiss Re has observed this to be particularly beneficial for Asian economies.
Across parts of Asia, surging semiconductor exports have more than offset the impact of higher oil prices," the report says.
But Swiss Re's Group Chief Economist, Jerome Jean Haegeli, cautions that geopolitical fragmentation can still dampen these growth opportunities.
"One example I could cite in Asia where you see fragmentation risks, and it's not just capital markets; it's also export restrictions on semiconductors or restrictions for FDI going into technology, which are sensitive, especially in today's global race of AI... and also digital and physical infrastructure," Mr Haegeli said at a press conference on the report.
Investment on this scale will likely be inflationary in the medium term as data centres, electrification and new factories compete for the same energy, grid capacity and construction resources. This may add to cost pressures even as it lifts growth, the report added.
Global insurance industry
On the global front, the insurance industry, according to the report, remains more relevant than ever in a world of recurring shocks and deepening fragmentation.
"We forecast total real premium growth (life and non-life) to ease to 1.3% in 2026 and 1.6% in 2027 (2025: 3.9%)," the report reads.
"The slowdown is uneven: global non-life real premium growth is softening to 0.6% in 2026 due to competitive pricing and slowing economic momentum, while life insurance growth will stay robust at 2.3% in real terms, supported by higher yields," the report added.
China will remain the world's largest insurance market by nominal value, according to the report, with India seen as the fastest-growing among the top 20.