Global non-life and life insurance market growth is expected to stay on trend at around 3% in 2020 and 2021, driven by emerging Asia and particularly China, according to reinsurance giant Swiss Re.
The global reinsurer’s latest Sigma report underlines an anticipation of continued premium growth in spite of an expectation that global economic growth will weaken in 2020 and 2021.
Group Chief Economist at Swiss Re, Jerome Jean Haegeli, commented: “Our outlook on global growth has deteriorated from a year ago. The US/China trade conflict has been more far reaching than anticipated.
“In a broader sense, geopolitical developments have not improved. Rather, we have seen more polarisation across the world, all of which has added to the environment of uncertainty, including for business. Going forward, the US/China trade conflict poses the top risk to global growth.”
Speaking at the reinsurer’s Sigma release earlier today, the firm’s Chief Economist highlighted the potential global impact of the US/China trade war, which is expected to be a key challenge for the economy going forward, alongside lower-for-longer interest rates.
Swiss Re does not expect any change in the challenging interest rate environment anytime soon and highlighted a need to for insurers to improve underwriting margins as investment returns become increasingly challenged.
Overall, non-life and life global insurance premium growth is expected to remain in trend at about 3%, and, once again, Swiss Re sees the majority of growth from emerging markets such as Asia, and particularly from China.
In China, non-life premiums are expected to grow by 9% in 2020 and life premiums by 11%.
“The exponential growth of mid-market private medical in China, with premiums up 1500% over the last two years, offers an indication of the size of potential. Resilience levels in other emerging markets could be strengthened significantly by taking learnings from the China experience,” said Haegeli.
According to Swiss Re, pricing in non-life insurance has improved in recent times as a result of rising loss costs in property catastrophe and US casualty business, as well as ongoing social inflation impacts, and the reinsurer expects this trend to continue moving forward.