European financial markets are closing 2025 in extremely mixed moods. While global insurance giants such as Swiss Re, AXA, and Allianz report record net and operating profits, the European Central Bank is grappling with its third consecutive annual loss. This situation reflects the impact of monetary policy on central banks and an exceptionally favorable period for the insurance sector, supported by a lower number of natural disasters.
Record Insurer Profits
Swiss Re, AXA, and Allianz report net profit increases of several dozen percent thanks to fewer natural disaster claims and operational restructuring.
ECB's Third Annual Loss
The European Central Bank recorded its third consecutive loss due to interest costs, halting dividend payments for eurozone countries.
Cement Giant's Problems
Conglomerate Holcim recorded a 73 percent drop in profit, burdened by the negative impact of the strong franc on sales results in the last quarter of the year.
Resilience of National Economies
French GDP grew by 0.9% in 2025, and the Swiss economy is growing according to forecasts, showing stability despite market turmoil.
An analysis of financial results for 2025 reveals a deep dichotomy in the European financial sector. The most attention is drawn to the condition of insurance and reinsurance giants. Swiss Swiss Re announced a net profit of USD 4.8 billion, representing an increase of nearly 47 percent year-on-year. This result surprised analysts, and the company's management responded by announcing a share buyback program. A similar dynamic is shown by German Munich Re, which exceeded its financial targets, and Allianz, forecasting an operating profit of EUR 17.4 billion in the coming year. The French group AXA closed the year with a net profit exceeding EUR 8.4 billion, a 24 percent increase. Industry representatives emphasize that such high results are a derivative of a decade of restructuring and relatively low natural disaster claim payouts last year. The European Central Bank, established in 1998, generated profits for most of its existence, which went to the budgets of eurozone member states. The current difficulties stem from the rapid cycle of interest rate hikes started in 2022 in response to inflation. A completely different picture emerges from the financial report prepared by the European Central Bank (ECB). The institution recorded a loss for 2025, marking the third consecutive negative result—the worst series in the bank's history. The main cause remains the cost of servicing bank reserves against a portfolio of fixed-income assets acquired during times of low rates. The Frankfurt-based bank informed that it will again not distribute any dividends to the central banks of member states, including the German Bundesbank. Nevertheless, ECB authorities reassure that this situation does not limit their ability to conduct effective monetary policy, as the reserves held are sufficient to cover negative financial results. Outside the financial sector, the situation is more varied. Construction giant Holcim had to face a drastic 73 percent drop in profit, which management attributes to the strong Swiss franc and weaker sales in the fourth quarter. Meanwhile, the German chemical conglomerate BASF managed to return to profitability thanks to cost-saving programs. However, French GDP growth of 0.9 percent for the whole of 2025 and stable growth of the Swiss economy suggest that the foundations of the European market remain resilient to global financial tensions.