Premium growth defies weak economies

July 7 2017 by InsuranceAsia News Staff

Global insurance premiums increased by 3.1% in real terms during 2016, a fairly solid outcome in an environment of moderate global economic growth, Swiss Re Institute’s latest Sigma report says.

The advanced economies were the main drag on global premiums compared to 2015, but growth in many emerging markets, excluding China, slowed also.

Global life premium growth slowed to 2.5% in 2016 from 4.4% in 2015 as advanced market premiums contracted, while life premiums in the emerging regions together grew by more than double the long-term average.

On the non-life side, global premiums grew 3.7% in 2016, reflecting relatively solid expansion among the emerging countries and another exceptional performance in China.

The emerging markets will likely fuel improvement in life premiums in the coming years, with China and India being the main growth drivers.

Non-life premium growth is expected to remain moderate, with stronger economic activity in the advanced markets supporting momentum.

Total direct insurance premiums written grew by 3.1% in real terms in 2016, down from 4.3% growth in 2015.

The increase in 2016 came despite global economic growth — a key driver of insurance demand — of just 2.5%.

In nominal dollar terms, global insurance premiums were up 2.9%. Nominal growth was lower than real due to currency depreciations, particularly in the UK and some emerging countries.