Global premium volume to nearly double by 2030, Munich Re predicts

Global premium volume is likely to reach around €7.9trn by 2030, almost double the volume of €4.2trn in 2017, according to Munich Re. Of the additional premium of €3.7trn by 2030, some €1.2trn is expected to come from China alone, with almost two thirds of this likely to derive from life and health insurance business, with the rest coming from property-casualty insurance, says the reinsurer in its Insurance Market Outlook for 2018/2019. Munich Re says the global insurance industry will grow more strongly than the global economy in 2018 and 2019. “This year and next, we expect global premium to grow by more than €460bn in all. This is equivalent to average annual premium growth of 5.3% (in real terms, when adjusted for inflation: 3.7%), whereas global GDP is expected to grow by only 4.9% (3.3% in real terms),” the report states. Property-casualty insurance is benefiting from the currently favourable economic environment, with Munich Re predicting annual growth rates of close to 5% (3.3% in real terms). Emerging countries are the primary growth drivers, but somewhat stronger growth rates in high-volume industrialised countries are also contributing to this positive development. In the USA and Western Europe, growth rates of between 3.5% and 4% (around 2% in real terms) should be achieved – slightly up on 2017. In the saturated markets of Asia, Munich Re says it is anticipating a slight increase in growth in 2018, although in 2019 the planned VAT increase in Japan is likely to weaken the economy there and consequently also premium growth. In the emerging markets, the report predicts high growth rates of 9.5% on average (7.9% in real terms) for 2018/2019. Growth in Latin America will come to around 6% (4% in real terms) in 2018/2019. In the Middle East and North Africa, there will be a high level of stable growth, and in Sub Saharan Africa normalisation should follow extraordinarily strong growth in 2017 as a result of the improved economic environment and significant rate increases in South Africa, states the report. “We expect to see declining growth rates in Eastern Europe and also in the emerging markets of Asia, where the forecasts are largely dependent on developments in China. Although average growth there should be very high at 14% (in real terms, still in double digits at close to 11%), this is likely to slowly flatten – in line with the economic trend,” says Munich Re. Looking ahead, the report predicts that in 2030 the USA will still be the world’s biggest insurance market, with a market share of almost 24%. China will move into second place, overtaking Japan. Interestingly, the report states that the currently much-discussed InsurTechs will play a rather subordinate part in market growth. “While we think that innovative start-ups may lead to something of a surge in premium growth in emerging markets and developing countries, we are not really expecting additional premium income in the industrialised countries. There, InsurTechs will change the market considerably through their role as digital brokers, as well as through product innovations and the use of new technologies along the value chain, but this is not expected to result in any significant change in premium growth,” says Munich Re.

Global premium volume to nearly double by 2030, Munich Re predicts

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