Swiss Re Institute has revealed that global insurance premiums went above the $5 trillion mark for the first time in 2018.
The report noted that the premium total – which represents more than 6% of world gross domestic product – was mostly the result of solid growth in the non-life insurance sector, particularly in China and other countries in emerging Asia, as well as some advanced markets.
Swiss Re forecasts that global insurance premiums will grow by 3% in real terms in 2019/20, driven by emerging markets. The institute also projected that life insurance premiums will increase by 2.9% within the same period – above the 0.6% annual average of the past 10 years. Non-life global premiums are anticipated to grow by 3%, led once again by emerging Asia.
China has been identified as a major driver in future premium growth; Swiss Re sees the country’s share of global premiums hitting 20% by 2029, up from its current 11%. The nation is also set to surpass the US as the largest insurance market by the mid-2030s.
“The outlook is promising,” commented Swiss Re group chief economist Jérôme Jean Haegeli. “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.”
Other key insights of the report include:
- In advanced markets, traditional life insurance savings business continues to be a challenge due to low interest rates in those regions.
- The ongoing development of advanced driver assistance systems will likely put pressure on motor premiums in the long term.
- The shift in global insurance business to Asia will continue.