Global insurance premiums exceed £4tn
Written by Deborah Ritchie
Global insurance premiums topped £4trn for first time ever in 2018 – a figure equivalent to more than 6% of global GDP and buoyed mainly by growth in non-life. And, according to analysts at Swiss Re, both life and non-life premiums look set to grow around 3% in real terms over 2019/20, based on strength in emerging markets across both sectors and solid growth in non-life in advanced markets.
Group chief economist at Swiss Re, Jérôme Jean Haegeli said the figures show that the role of the insurance industry as a long-term investor is becoming ever more important.
"Global direct premiums written were equivalent to more than 6% of world GDP in 2018, underlining the very significant role insurance plays in supporting sustainable development and global resilience,” he explained.
The US remains the world’s largest insurance market, followed by China and Japan as the ongoing shift east continues. By 2029, Swiss Re predicts Asia-Pacific will account for 42% of global premiums – China’s share forecast to be 20%, with the country on course to become the largest insurance market by mid-2030s.
Haegeli is encouraged by the outlook. "While global economic growth is slowing, we expect insurance demand to hold up over the next two years, and China will be the main contributor to premium volume gains in both the life and non-life sectors," he said.
Emerging Asia will be the world's fastest growing region, with strong demand for health, liability and agriculture covers. The non-life sectors in the Middle East, Africa and Latin America will recover as economies in those regions strengthen.
Non-life premiums in the advanced markets will grow by 1.8%, slower than in 2018 but above the historic average of 1.1%, according to Swiss Re's data. It bases this forecast on still solid premium growth expectations in the US and Canada, with premium rate increases lending support. Profitability in non-life insurance overall will remain under pressure.
Looking ahead, the insurance giant says the non-life sector faces a "fundamental structural shift over the next decades", with a possible decline in premiums from currently dominant motor cover – the potential decline is expected to result from advanced driver-assistance systems and self-driving car technologies.