Global insurance premiums exceed $5 trillion for the first time
Insurance premiums worldwide is now equivalent to more than six percent of world GDP, says a report from Swiss Re.
Global insurance premiums passed the US$5 trillion mark for the first time in 2018, equivalent to more than 6% of world GDP, according to a new report from the Swiss Re Institute.
The worldwide increase in premiums was based mostly on solid growth in the non-life sector, particularly in China and other countries in emerging Asia, as well as growth in advanced markets.
The Swiss Re Institute noted that global insurance premiums were forecast to grow by 3% in real terms in 2019/20, led by the emerging markets. Life premiums were forecast to increase by 2.9%, well above the 0.6% annual average of the previous 10 years, with a bounce back in China the main driver.
In non-life, the Swiss Re Institute added, global premiums were forecast to grow by 3%, with emerging Asia taking the lead, supported by solid growth in advanced markets. China will contribute most to life and non-life premium growth over the next two years, and its share of global premiums will reach 20% by 2029, up from around 11% currently. China remains on course to surpass the United States as the largest insurance market by the mid-2030s.
“Global direct premiums written were equivalent to more than 6% of world GDP in 2018, underlining the very significant role insurance plays in supporting sustainable development and global resilience. With $5 trillion of premiums written globally per year, the role of the insurance industry as a long-term investor is becoming ever more important,” said Jérôme Jean Haegeli, group chief economist at Swiss Re.
Global non-life premium growth was solid at 3% in 2018, outpacing the historic average (2.2%) as advanced markets slowed and emerging markets grew. In China, non-life premiums rose by 12%, driven by strong increases in personal accident and health insurance. This was accompanied by a solid performance in emerging Asia overall. Growth in the global life sector was subdued due to shrinking markets in Europe, China, and Latin America.
Related:
- Edging ahead: 2018′s P&C industry premium leaders
- The top 100 insurance groups of 2018
- P&C outlook in 2019 is mostly stable after rocky past two years: AM Best
This article first published on Law.com, a sister publication of PropertyCasualty360.