Global insurance premiums passed the US$5 trillion mark for the first time in 2018, equivalent to more than six percent of world gross domestic product (“GDP”).
This was based mostly on solid growth in the non-life sector, particularly in China and other countries in emerging Asia, and also among advanced markets, according to a new report from the Swiss Re Institute.
The Swiss Re Institute noted that global insurance premiums were forecast to grow by three percent in real terms in 2019/20, led by the emerging markets. Life premiums were forecast to increase by 2.9 percent, well above the 0.6 percent 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 three percent, 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 percent by 2029, up from around 11 percent 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 six percent of world GDP in 2018, underlining the very significant role insurance plays in supporting sustainable development and global resilience. With US$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 three percent in 2018, outpacing the historic average (2.2 percent) as advanced markets slowed and emerging markets grew. In China, non-life premiums rose by 12 percent, 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.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].