The unweighted overall score for all pension systems analyzed is 3.7, signaling continued high pressure to reform. Compared to our last report from 2023, there has been some movements – but not always in the right direction.
Economic outlook 2025-26: Defying gravity?
Global economic growth: Not quite "dancing through life". Global real GDP growth is expected to remain moderate but steady at +2.8% in 2025-26. Steady (not stellar) global growth ahead at +2.8% until 2026, in line with the long-term average. : Momentum is gradually building in Asia, though Europe will remain the exception, with the economy only exiting recession by the end of 2024. Domestic demand continues to slow in China as policy easing can only partly compensate for the headwinds brought on by the continued real estate crisis.
Capital markets remain under the spell of central banks:Markets are now pricing a strong policy rate-cutting cycle for most Western central banks, dragging long-term government bond yields lower. This provides some tailwind to riskier investments, with government bond spreads in Southern Asia narrowing further. As we see slightly less easing by the Fed and the ECB compared to market pricing, we do not expect long-term yields to fall below current levels in the near term.
Sector Pathways Reports: What it takes to limit global warming to 1.5°C
How to drastically reduce greenhouse gas emissions has become one of the most central questions of this century. Tackling this challenge requires timely climate action. We explore some of the most relevant sectors from the perspective of the EU’s Green Deal ambition, and identify what gaps still need to be addressed to limit global warming to 1.5°C.
Primary energy provision including oil, gas and coal, but also sustainable fuels, utilities in the secondary energy sector including conversion to electricity and heat as well as the transport and distribution of energy, end use of energy in the transport industry including road transport, aviation and shipping, in agriculture and forestry, including carbon farming and land use, in buildings including private and commercial real estate and in energy efficiency as well as sector coupling and in industry including hard to abate sectors like steel, cement and chemicals.
Insuring the future: The virtuous cycle of insurance and sustainability
This report examines how insurers can contribute to achieving the UN’s Sustainable Development Goals (SDGs) through innovative products, inclusive financial protection, and sustainable investments. Explore the findings and recommendations.
We propose that a virtuous cycle of profitable insurance and resilient sustainability can be created. Realizing this potential will require overcoming obstacles such as short-term financial pressures, although in the long run, financial stability and environmental stewardship are mutually reinforcing, rather than competing priorities. Thus, regulators should provide frameworks that make sustainability a competitive advantage in the insurance industry, for example by implementing firm caps on insured and financed carbon emissions to support the achievement of net-zero goals.
The insurance industry itself can greatly amplify its contribution to sustainability by prioritizing resilience-focused products, promoting inclusive access to financial protection, fully integrating ESG criteria and strengthening measurement and reporting standards. Each of these strategies not only strengthens the sector’s alignment with SDGs but also reinforces insurers‘ long-term value proposition as essential partners in building a resilient and equitable future.
The corporate battlefield: Global insolvencies in times of war economics
A full-fledged trade war could also push global insolvencies up by about +8% in 2025 and 2026Our insolvency outlook could deteriorate should the European economy perform weaker than expected, with a stronger lack of momentum, or if there is weaker resilience in APAC and larger headwinds from China, as well as if the outlook for the US deteriorates further. Geopolitics could also be a major factor of turbulence, with the ongoing conflicts in Russia-Ukraine and the Middle East, tensions in the South-China-Sea and political uncertainties in Taiwan. Trade uncertainty and potential tariffs have already contributed to increase our global forecasts by +1.4pp for both 2025 and 2026. Yet, a full-fledged trade war would lead to an additional +2.1pp and +4.8pps increase to +7.8% and +8.3% globally in 2025 and 2026. For 2025-2026, this would mean +6,800 additional cases in the US and +9,100 in Western Europe.
Meanwhile, regulatory changes could also shape long-term insolvency trends in Europe. In an unusually bold move, the European Commission announced a new 28th legal regime, which would exist alongside the national legal systems of the 27 EU member states: The idea behind this concept is to create an optional legal framework that businesses and individuals across the EU could choose to operate under, simplifying cross-border transactions and reducing legal fragmentation. The proposal is likely to focus on putting forward a unique digital identity recognized across all EU member states, and a harmonized legal framework for corporate law, insolvency, labor laws, and possibly taxation. While this will not have a strong impact on insolvencies in the short term, a 28th regime should intensify competition within the internal market in the longer term and structurally increase insolvencies in less competitive regions. Additionally, far reaching changes in the regulatory framework on insolvencies should be announced in the Commission’s upcoming communication on completing the “Saving and Investment Union” and could lead to higher insolvencies in less stringent jurisdictions, who will be pressured to comply with the new EU rules. Meanwhile, limiting payment terms to 30 days remains under discussion in Brussels. Movement on this front could accentuate insolvencies in an already fragile region through an increase in the liquidity gap