Global premiums written grew 2.4% in 2012: Swiss Re study

Global premium for the non-life insurance sector grew 2.6% last year, and premium growth is likely to improve further in the near term, according to the latest sigma study from Swiss Re.

Overall, total global premiums written increased to $4.61 trillion, according to the reinsurance company. Non-life business accounted for nearly $2 trillion of that, Swiss Re said.

“The gradual hardening of prices in non-life insurance is likely to broaden and deepen,” Swiss Re said. “However, the weak economy in the Eurozone will remain a drag on insurance demand in the region.”

The growth also didn’t match the pre-financial crisis rate, the company noted.

“Premium growth held up well given the challenging economic environment,” Daniel Staib, one of the authors of the sigma study, noted in a Swiss Re statement.

“The non-life market was supported by steady increases in risk exposures in emerging markets and by selective premium rate increases in some advanced markets, particularly in Asia,” he added.

Low interest rates continue to be a challenge, especially for the life insurance sector, Staib also noted.

Growth is set to continue, although not likely to reach pre-crisis levels in the short term, according to Swiss Re.

“The non-life side is more positive since the sector will benefit from the strong economic performance of emerging markets and selective rate increases in advanced markets,” Mahesh Puttaiah, another of the study’s authors, said. “However, rate increases will likely be moderate given the prevailing surplus capacity in the markets.”

Over the next 10 years, insurance markets in Asia will continue to rise in importance, Swiss Re suggests.

“The rise in importance of emerging Asia in the global economy and insurance markets witnessed over the past 20 years is set to continue for at least another decade,” Swiss Re’s chief economist, Kurt Karl, noted.

“However, demographic patterns suggest that by 2062, Asia’s share in the world population will actually decrease from 60% to 53%, mainly due to the developments in China, where the working age population will start to contract from 2018,” he said.

“At the same time, Africa’s population share is projected to increase from 15% currently to roughly 27%. This positions Africa well, from a demographic point of view, to become an important part of the global insurance markets over the next 50 years.”