Swiss Re has released its annual insurance premium report – including an in-depth analysis of the economic and societal context shaping the insurance industry, premium volumes by country, penetration rates, insurance density, and key macroeconomic indicators.
In the Swiss Re Institute’s latest world insurance premium sigma report, economists said they expect a strong global economic recovery from COVID-19 to lead to historically high global real gross domestic product (GDP) growth of 5.8% in 2021.
The Swiss Re Institute economists expect global insurance premiums to follow that strong economic growth, increasing by approximately 3.3% in 2021 to a total of US$6.9 trillion. In the same year, they predict key market insurance premium to grow by 6.3% in China, 1.7% in the US, 2.8% in Western Europe, and 5.6% for emerging markets. For 2022, the report forecasts 3.9% insurance premium growth.
“We expect the insurance industry to earn a record US$7 trillion in premium by the end of next year,” said Jerome Haegeli, group chief economist at Swiss Re Institute. “The best preparation for the next economic shock is having economic buffers in place. However, fiscal and monetary buffers are being depleted, which means the private insurance sector is increasingly important. Narrowing protection gaps needs to become an economic policy goal.”
Swiss Re's annual insurance premium report examined how factors such as inflation and digitalisation are influencing insurance industry development.
The report noted that positive development in consumer awareness is a key opportunity for insurers as it has been “cemented by the COVID-19 pandemic.” It also highlighted how global health and protection-type insurance premiums increased by 1.9% and 1.7%, respectively, in 2020, as the pandemic increased awareness of the value of health and protection-type production.
”The economic upswing expected in 2021 and 2022 is on track to materialise, and this is a key factor for insurance premium growth across the globe. The main market to watch is China, where both economic and premium growth continue at a strong pace,” Haegeli said.
“Consumer awareness is clearly an important growth driver, and this has been driven by the pandemic. Whether it is private medical insurance or supply chain interruption for businesses, people have become much more aware of what insurance is and how it can help them to emerge resilient from such a crisis.”