SECTORAL DEVELOPMENTS
BANKING
Between 2014 and 2024, Luxembourg’s banking sector experienced substantial changes leading to strong asset growth, structural consolidation, and a slight reduction in geographic diversity.
Total bank assets rose from EUR 739.2bn to EUR 957.8bn – an increase of nearly 30% – underscoring the country's strength as a global banking centre. During the same period, the number of banks operating in Luxembourg declined from 144 to 115, reflecting broader consolidation trends across the European Union.
Notably, the number of non-EU institutions remained relatively stable, while EU banks accounted for much of the decline. Additionally, the number of countries represented by these institutions decreased slightly from 27 to 25, suggesting a modest contraction in geographic diversity[11].
Despite these developments, overall employment in banking remained stable, while total assets continued to grow – underscoring the resilience, international nature, and cross-border expertise that define Luxembourg’s financial industry.
INVESTMENT FUND MANAGEMENT
Luxembourg’s investment fund management sector ended 2024 recording EUR 7.4trn in assets under management (AuM). UCITS assets make up slightly over 64% of total assets (EUR 4.8trn) with the rest coming from Alternative Investment Funds (AIFs).
Over the past seven years [12], the share of UCITS funds, historically dominant, has declined as a proportion of total AuM. In contrast, AIFs have experienced remarkable growth, more than tripling in size from EUR 833.7bn in 2018 to EUR 2.6trn at the end of 2024. As a result, their share of total AuM rose significantly, from 19.9% to 35.7%.
Notably, since 2020, UCITS assets have fluctuated, primarily due to public market driven effects. AuM has however continued to grow, and in 2024 volumes are close to the historic highs of 2021, a year that saw particularly strong growth in global equity markets. Part of the recovery in UCITS AuM since 2022 is also reflected in the strong growth in ETF AuM in Luxembourg, which has grown by 18% year-on-year since 2023 [13].
AIFs have also shown consistent growth. This trend highlights investor appetite towards alternative investment strategies, likely driven by the pursuit of diversification, inflation protection, and higher yields.
It also underscores Luxembourg’s strategic success in capturing this growth by positioning itself as the domicile of choice for alternative assets funds, particularly amid rising geopolitical uncertainty and subdued performance in public markets.
Indeed, among European-managed private capital funds that commenced investments in 2024, more than half were domiciled in Luxembourg [14]. The country also holds 67% of the European Long-Term Investment Fund (ELTIF) market share, a dominance that rises to close to 90% when purely domestic ELTIFs are excluded [15]. These figures highlight Luxembourg’s pivotal role in cross-border long-term investments and its contribution to channelling capital into strategic EU projects.
INSURANCE
Between 2014 and 2024, Luxembourg’s insurance sector experienced significant growth in underwritten premiums, alongside a consolidation in the number of market participants.
Total underwritten premiums rose from EUR 36.2bn in 2014 to EUR 63.6bn in 2024 more than doubling over the decade. Despite a temporary dip in 2020 and more recently in 2023, the market rebounded strongly in 2024, reaching a new record well above historic levels.
Life insurance remains the dominant segment, though it experienced some volatility over the decade. Indeed, premiums stood at EUR 23.8bn in 2014, peaked at EUR 29.3 bn in 2021, and declined to EUR 21.3bn in 2023, as a result of difficult market conditions. However, 2024 marked a clear recovery, with life premiums rising to a new record of EUR 29.5bn (+38.5% year-on-year), driven primarily by renewed investor appetite for guaranteed return products amid economic uncertainty and heightened market volatility.
In contrast, non-life insurance saw a rapid expansion growing sixfold from EUR 3.2bn in 2014 to EUR 19.6bn in 2024. This growth was largely fuelled by Brexit-related relocations of insurers to Luxembourg and expansion of related Luxembourg business subsequently. After robust performance in 2021 and 2022, the pace of expansion moderated in 2023 and 2024, reflecting a more mature market.
Reinsurance revenues also posted steady growth, increasing at an average annual rate of 4.5%—from EUR 9.3bn in 2014 to EUR 14.5 in 2024. This reflects sustained demand for risk transfer solutions, particularly from international cedants, reinforcing Luxembourg’s strong standing in the global reinsurance sector.
Between 2014 and 2024, the number of Luxembourg-based insurance undertakings (entreprises de droit luxembourgeois) declined in the life and reinsurance businesses — although based on initial 2025 data we can already see a return to growth in reinsurance firms[16].
In contrast, the non-life segment saw an increase in the number of firms over the period. This evolution reflects an industry in transition — marked by consolidation and growing specialisation — while maintaining diversification in premium sources and demonstrating resilience in the face of evolving global risks.
[11] ABBL
[12] Due to limitations in data availability, it is not feasible to calculate the AuM using this methodology (see Annex I) for periods prior to 2018.
[13] ALFI, CSSF
[14] Preqin
[15] ESMA
[16] Please refer to table 2.1 of the annex to the CAA annual report 2024 for further information (Click here - in French)