The insurance industry will overcome the recent COVID-19-induced pull back, with rate hardening in commercial lines supporting profitability and a general COVID-related risk awareness expected to support premium growth -- seeing off the sharpest economic contraction since the 1930s.

This is the upbeat forecast from the Swiss Re Institute. A predicted slump in demand for insurance in 2020, it says will return to pre-crisis levels in just one year, alongside more protracted recovery in the global economy. The emerging economies, led by China, is expected to underpin this impressive comeback.

"The insurance industry is showing resilience in face of the COVID-19-led economic downturn," Jerome Jean Haegeli, group chief economist at Swiss Re said. "The magnitude of premium losses will be similar to that seen during the global financial crisis in 2008-09, even though this year's economic contraction of around 4% will be much more severe. Unlike for the global economy, we expect a strong V-shaped recovery in insurance premiums, a remarkable showing considering that the world is currently in the throes of the deepest recession ever."

Swiss Re's analysts believe this year's recession will be the deepest since the Great Depression of the 1930s, but it will also be short-lived. Global commercial insurance premiums are forecast to be broadly flat (-0.1%) after growing by 3.5% in 2019. The key reason for this is that the COVID-19 crisis has hit at a time of rate hardening in the sector, which has supported premium growth.

Premiums in trade and travel-related insurance business such as marine, aviation and credit will be hit the hardest. Property and medical business will be more stable.

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