Global life insurance premium may grow by 4.8 percent in 2017, mainly driven by demand for savings vehicles, particularly in emerging Asia, including India, a Swiss Re report said.
The global economy is expected to grow moderately over the next two years, supporting continued growth in insurance premium volumes.
Growth in global non-life premiums is forecast to fall slightly from 2.4 percent in 2016, in real terms to 2.2 percent in 2017, and accelerate to 3 percent in 2018.
In the life sector, global premiums are expected to grow by 4.8 percent in 2017, and 4.2 percent in 2018, Swiss Re’s report on global insurance review and outlook for 2017/18 revealed.
The emerging markets, in particular emerging Asia, will be the main driver of premium growth in both the non-life and life sectors, it added.
Of the major economies, the US is expected to grow by slightly more than 2 percent in inflation-adjusted terms annually over the next two years.
The Euro area and the UK are forecast to grow by about 1 percent and 1.5 percent, respectively, while Japan should grow by less than 1 percent, it said.
The insurance industry faces headwinds, with moderate economic growth, and still ample capacity in the markets creating a challenging pricing environment.
Nevertheless, premium volumes continue to grow, in both the advanced and emerging markets along with economic activity and an increase in the insurance penetration rate, particularly in emerging markets, Swiss Re’s Chief Economist Kurt Karl said.
Premium growth in emerging markets is forecast to increase steadily from an estimated 5.3 percent in 2016 to 5.7 percent in 2017 and 6.7 percent in 2018, Swiss Re said.
An improvement in commodity prices and strengthening economic activity will stimulate increased demand for insurance from the emerging regions, the report said.
Emerging Asia will likely have the strongest growth in non-life premiums, forecast to be nearly 8 percent in 2017 and 9 percent in 2018.
Meanwhile, demand for savings products in emerging markets will drive life premiums in the sector, premium growth is expected to be significantly stronger than in non-life.
Global life premium volumes are forecast to grow by 5.4 percent, 4.8 percent and 4.2 percent in 2016, 2017 and 2018, respectively.
Emerging market life premiums is expected to grow by 14.9 percent in 2017 and 10.9 percent in 2018, supported by robust growth of savings products, mainly in emerging Asia.
In life reinsurance, global premium growth is expected to be about 1.5 percent in 2016 and 1 percent in the years 2017 and 2018, primarily due to very low growth in the advanced economies where the bulk of cessions originate.
Reinsurance premium growth in the emerging markets is forecast to be 8 percent or higher, the report said.