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Insurance investment outlook 2025: Navigating evolving markets and regulations
- 11 December 2024 (7 min read)
A strong US economy and market, alongside benign economic conditions in Europe and other developed markets have helped insurers strengthen their balance sheets and boost their investment earnings while restoring liquidity buffers.
However, looking towards 2025, there is no shortage of political, geopolitical and economic uncertainty.
Donald Trump’s re-election as US President could be a gamechanger for financial markets. While there is uncertainty around the new administration’s ability to execute its campaign promises in full, these promises are viewed as inflationary - and being priced in as such by the market.
Supply shocks from a potential labour shortage and tariffs, combined with sustained fiscal stimulus, might put pressure on prices and force the Federal Reserve to maintain a certain level of financial restriction. This in turn could dampen the US growth outlook, although from an above trend level, and have repercussions for Europe, China, and the broader emerging market world.
Meanwhile Europe is now facing gloomier economic conditions, marked by concerns over France’s public deficit and fiscal tightening and energy costs and broader business model issues for Germany. This should convince the European Central Bank to significantly ease monetary conditions, which could support the region’s 2025 growth outlook – albeit with potentially significant downward risks on the radar.
Disclaimer
This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.
Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.