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Headline : Global insurance premiums increased by 3.1% in 2016; down from 4.3% growth in 2015.
 
News Date : Jul 05, 2017
Source : AIP News Bureau
 
Life premiums will be mainly driven by China and India

· Global insurance premiums increased by 3.1% in 2016; down from 4.3% growth in 2015.

·  Life premium growth slowed to 2.5% and non-life to 3.7% in 2016, due to weaker performance in advanced markets

· Profitability in the life and non-life sectors weakened amid low interest rates and robust competition

·  Life and non-life premiums in China grew very strongly, but many other emerging markets were in slowdown mode

· Emerging markets to continue to drive global premium growth; stronger activity in advanced economies to boost non-life sector

·Special chapter says digital distribution in insurance is growing, but agents and brokers will continue to play an important role

 

Zurich:

Global insurance premiums increased by 3.1% in real terms in 2016,  a fairly solid outcome in an environment of moderate global economic growth, Swiss Re Institute's latest sigma report says. The main cause of the weaker global premium development compared to 2015 were the advanced economies but growth in many emerging markets – excluding China – slowed also. 



Global life premium growth slowed to 2.5% in 2016 from 4.4% in 2015 as advanced market premiums contracted, while life premiums in the emerging regions together grew by more than double the long-term average. On the non-life side, global premiums grew 3.7% in 2016, reflecting relatively solid expansion among the emerging countries and another exceptional performance in China. 



The emerging markets will likely fuel improvement in life premiums in the coming years, with China and India being the main growth drivers. Non-life premium growth is expected to remain moderate, with stronger economic activity in the advanced markets supporting momentum.


Total direct insurance premiums written grew by 3.1% in real terms in 2016, down from 4.3% growth in 2015.


 The increase in 2016 came despite global economic growth – a key driver of insurance demand – of just 2.5%. In nominal USD terms, global insurance premiums were up 2.9%. 


Nominal growth was lower than real due to currency depreciations, particularly in the UK and some emerging countries.


China growth engine steams ahead, in life and non-life sectors 


Global direct life insurance premiums totalled USD 2 617 billion in 2016, up 2.5% in real terms. This was slower than the 4.4% expansion in 2015 but still above the 10-year average of 1.1% growth. 


Emerging markets remained the main source of global growth, with premiums up 17%, more than twice the 10-year average of 8.4%, and primarily driven by rapid growth in China. 



"The life sector in China is growing very rapidly," says Kurt Karl, Chief Economist at Swiss Re. "Sales of traditional life products were very strong in 2016, benefitting from further liberalisation of interest rates and government efforts to encourage growth of protection products."

 

 
 

 
 

 
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