The global insurance industry is set to grow more strongly at 4.5 percent per annum on average (3.0 percent in real terms, or adjusted for inflation) during 2017 and 2018, according to Munich Re.
While premium income is likely to grow only nominally this year, slightly higher real growth of 3.0 percent is expected for 2018, said statistics issued by the reinsurer.
Premiums in the insurance sector therefore are likely to evolve in line with the global economy, which should show real growth of 2.9 percent in 2017 and 3.1 percent in 2018, said the company, noting that premium growth will be slightly higher than that of 2016, and “significantly exceed the average growth rate of almost 2 percent for the past 10 years.”
Munich Re attributed growth outlook to better economic prospects in the U.S. and in many emerging markets, which will offset negative factors such as declining growth in the Chinese market.
The Asian emerging markets are expected to have the greatest potential for growth. Indeed, Munich Re said that primary insurance premiums are expected to be equal to that of Western Europe within the next few years.
“The economies of many emerging markets, such as Brazil, but even Russia, are experiencing a significant recovery,” said Michael Menhart, chief economist at Munich Re. “This is leading to increased growth in property-casualty insurance. In most of the industrialized world – in the eurozone, the U.S. and Japan – demand has been bolstered by a solid economic environment.”