According to Swiss Re‘s publication Global insurance review and outlook for 2017/18, next year will bring growth opportunities to the insurance sector, supported by a moderate global economic growth.
Growth in global non-life premiums is forecast to fall from 2.4% in 2016 to 2.2% next year and growth again to 3.0% in 2018. Life-premiums are expected to grow 4.8% in 2017 and 4.2% in 2018.
Emerging markets will be the main drivers of life and non-life premiums.
US insurance sector is expected to grow about 2% over the next two years, while the Euro zone and the UK are forecast to grow 1.0% and 1.5% respectively. In Asia, Japan could grow by less than 1%. However, China is expected to grow 6.5%.
Kurt Karl, Swiss Re’s Chief Economist says: “The insurance industry faces headwinds, with moderate economic growth, and still ample capacity in the markets creating a challenging pricing environment…Nevertheless, premium volumes continue to grow, in both the advanced and emerging markets along with economic activity and an increase in the insurance penetration rate, particularly in emerging markets.”
Emerging markets like Asia, are expected to increase premiums in global premiums, from an estimated of 5.3% in 2016 to 5.7% in 2017 and 6.7% in 2018. According to the report, China’s One Belt One Road program will generate an increase in demand for commercial insurance due to the investment opportunities.
The non-life sector will face some challenges. However, the awareness of risks associated with cyberattacks and data breaches will cause a boosting demand for cyber insurance.
The life premiums sector are forecast to grow by 4.8% and 4.2% in 2017 and 2018 respectively. The major driver will be the emerging markets due to economic growth, growing populations, and urbanisation. China will be a strong contributor, with the government targeting an increase in insurance penetration to 5% by 2020, from 3% in 2014.
To read the full report, please go to: http://www.swissre.com/media/news_releases/Sustained_insurance_sector_growth_in_2017_largely_based_on_demand_from_emerging_markets.html
