Global premium growth at 3% in 2019, 2020: Swiss Re
Global premiums in non-life and life businesses are forecast to grow by around 3 percent annually in 2019 and 2020 while the expansion in emerging Asia will be three times higher, according to the latest Swiss Re sigma report.
The economic power shift from west to east will drive insurance sector development to 2020 and beyond, the report suggested. Wealth in the emerging markets has grown significantly and a 1-percentage-point rise in gross domestic product (GDP) 2018 has a much greater impact in premium volume terms than it would have had a decade ago.
“China and emerging Asia in particular, will be the main source of insurance demand in the coming years," said Jérôme Jean Haegeli, chief economist at Swiss Re.
Swiss Re has introduced a “high growth strategy” a few years ago calling for businesses to earn about 30 percent of premiums out of high-growth markets by 2020. According to the reinsurer’s 2018 results, 15 percent of premium earned of Swiss Re came from Asia and about 24 percent of premiums came from high-growth markets.
Overall, profitability is set to improve incrementally, said Dan Ryan, head of insurance risk research at Swiss Re during a presentation. While 2017 has been a difficult year for the re/insurance industry with natural catastrophe losses in the region of $144 billion, Swiss Re is expecting losses of around $60 billion in 2018, Ryan said.
On the life side, rising interest rates will steadily support investment income, Ryan noted.
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