Underwriting profits to rise in 2018
Underwriting profits globally are likely to improve in 2018, assuming average natural catastrophe losses, as rates reacted after US and Latin America natural catastrophe losses, Swiss Re chief economist Jerome Haegeli said in the BestWeek Asia-Pacific edition.
Positive rate dynamics and demand for new covers will support industry growth in the coming years, Haegeli added.
Global nonlife premium is expected to increase by at least 3 percent in 2018 and 2019. In the longer term, Haegeli said growth will be driven by demand for cover on new and evolving risks such as cyber, non-physical business interruption, product recall and reputational risk, especially in mature markets.
In 2017, the global non-life insurance sector’s profitability declined sharply due to large catastrophe losses in the US, low investment yields and soft underwriting conditions. Return on equity dropped to an estimated 3 percent from 6 percent a year ago. Haegeli also said that investment yields to profitability fell to about 9 percent of net earned premiums in 2017.
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