Swiss Re predicts global insurance growth

Demand for non-life insurance is expected to grow, led by an 8% to 9% annual gain in the emerging markets in 2016 and 2017, according to Swiss Re's 'Global insurance review 2015 and Outlook 2016/17'. The review said that the global economy is expected to strengthen moderately next year. The US and the UK economies are currently growing by close to 2.5%, and real gross domestic product (GDP) growth in Japan and the Euro area are a more subdued 0.7% and 1.5%, respectively. The four major economies are all expected to see slightly better growth in 2016. Emerging markets will grow by about 5% in each of the next two years, an improvement on the current 4% pace. Kurt Karl, Swiss Re's Chief Economist, said that global economic growth is a good sign for insurers: "This is especially so in the emerging markets, where urbanisation and growing wealth will support overall sector growth. "We've said for some years now that emerging markets are the growth engines for the insurance industry- and this is expected to continue for at least several years more."hideDemand for primary non-life insurance should increase over the next two year, said Swiss Re. Global primary non-life premium growth is forecast to improve to 3% in 2016 and 3.2% in 2017, from 2.5% this year. Growth in advanced markets is expected to slow slightly due to the generally softening prices and only a modest improvement in economic growth. Emerging markets keep emerging Non-life premiums in the emerging markets are estimated to have risen by 5.6% in 2015, down from a 6.3% gain in 2014. Emerging Asia performed best with growth of around 12%. "In China, premium growth has been supported by rising rates in motor and the rapid development of liability, agriculture and credit & surety insurance," said Swiss Re. Other markets in the region also performed well in 2015, supported by infrastructure investments and expansion in motor. The Philippines (+14%) and Vietnam (+11%) reported the fastest growth in Southeast Asia. In the Philippines, there was broad-based expansion in most lines and in Vietnam, the lifting of capital restrictions on the establishment of new branches supported sector growth. In India, premiums grew by 7.9%, up from 2.7% in 2014, due to a stronger economy. In Latin America, non-life premiums fell 0.2% in 2015, after increasing by 4.8% a year ago. This was mainly due to a sharp drop in Brazil, from 8.2% growth in 2014 to a 5% contraction in 2015, said Swiss Re. Premiums in Venezuela fell by more than 25% in 2015 amid a protracted economic crisis premiums in Venezuela are projected to shrink further in 2016 and 2017. There was improvement in Mexico, Argentina and Chile, as well as steady growth in other regional economies such as Colombia and Peru. CEE slumps, MENA rises In Central and Eastern Europe, premiums were down 4.4%, with non-life premiums in Russia contracting by 12% in Russia. In Poland, premiums were down for the fourth year in a row, but only by 0.8%. In MENA, sustained investment in infrastructure, rising motor premiums and continued strong growth in the health segment, particularly in the GCC countries, pushed non-life premium growth up to 6.1% in 2015 from 4.1% in 2014. Swiss Re said that in Sub-Saharan Africa, GDP growth is estimated to have slowed to around 3.8% in 2015 from 4.7% in 2014, but the region is still the fastest growing after emerging Asia. Overall, underwriting results have been healthy in the non-life sector in emerging markets, partly due to the absence of major natural catastrophe losses. Looking ahead, the report noted that non-life premium growth in emerging markets is expected to be around 8-9% annually in the coming two years. "In emerging Asia, China will continue to support growth, and India and Southeast Asia are also expected to contribute. Competitive pressures will intensify in China and Malaysia with ongoing motor de-tariffication in those markets. "Expectations of stronger economic growth in CEE and Latin America should translate into stronger non-life premium growth in both regions in 2016 and 2017, although recovery will likely be slow," said Swiss Re.

Swiss Re predicts global insurance growth

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