Frédérique De Simone
5 July 2019 11:30
Photo : Freepik
Insurance premiums worldwide have exceeded the 5 000 billion dollars us (US$ billion) for the first time in 2018, which is more than 6 % of the gross domestic product (GDP) world, says reinsurer Swiss Re in its latest study released on Thursday.
“The direct premiums global syndicated accounted for over 6% of the global GDP in 2018, which recalls the very important role of the insurance in the maintenance of sustainable development and global resilience. With 5 000 billion US dollars of premiums written each year in the world, the insurance sector plays a role more and more important as a long-term investor, ” said Jerome Jean Haegeli, group chief economist, Swiss Re.
Significant growth in damage insurance…
The growth of premiums in the property and casualty insurance at a global level, is established at 3 % in 2018, exceeding the historical average of 2.2 %, mainly due to the slowdown in mature markets and growth in emerging markets. In China, premiums for insurance have increased by 12 %, due to higher insurance and accident and sickness. This evolution has been felt in all emerging countries of Asia.
…but moderate in life insurance
The growth of the life insurance on a global scale has been moderate in 2018, due to the contraction of markets in Europe, China and Latin America. However, they are expected to increase by 2.9% in 2019 and 2020, and thus exceed the annual average, for the last 10 years, 0.6 %, says Swiss Re. This increase will be mainly due to the strength of the emerging markets, where premiums are expected to increase by 8.7 %. China, in particular, is expected to contribute to nearly half of the increase of life insurance premiums worldwide over the next two years, provides for the reinsurer, based in zurich.
The large life insurance markets are expected to see their premiums increase by 1,2 % in 2019 and in 2020. The United States and Canada will be in the lead, thanks to the strong growth in the annuity business and the growth of wages and employment. In Asia-Pacific, engine of growth in the long term, such as the aging of the population and the growing prosperity, will foster the growth of premiums. The traditional activity of savings will remain unattractive to consumers due to low interest rates. The overall profitability of the sector will remain weak for the same reason.
The future belongs to China
In the publication of the results of its latest study, the reinsurer placing on china as the next world leader in insurance markets. Swiss Re explained that if the evolution of premiums witnessed an increase as important, it is in part due to the strong growth of the market of insurance in China and emerging countries. If China continues on this path, it surplombera the United States at the forefront of the global market of the insurance in 2030.
The study of Swiss Re estimates that the Asia-Pacific is expected to represent 42 % of the premiums in the world by 2029. China will be one of the main drivers of this evolution. Although currently the market of china is still less than 40 % of Americans, its share in the world premiums is increased from 0 % in 1980 to 11 % in 2018 and is expected to reach 20 % in 10 years, which is almost as high as the share projected for the area as a whole, including Europe, the Middle East and Africa. China will be among the main countries-contributors of life insurance premiums, and damage in the course of the next two years.
With the growing importance of the chinese market, the research institute of Swiss Re, will soon open a centre in Beijing. The objective of this centre is to enable Swiss Re to rely on the research and development activities related to the China to be able to make better use of them.
Next Monday, in our newsletter web FlashFinance.ca, check out statistics Canada’s own, according to Swiss Re.