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Moderate global growth to drive insurance premium volumes up in 2017, 2018
INSURANCE premium volumes are expected to continue growing, given that the global economy is expected to grow moderately over the next two years, reinsurer Swiss Re said on Wednesday.
In its publication "Global insurance review and outlook for 2017/2018", it said growth in global non-life premiums is estimated to drop slightly from 2.4 per cent in 2016 in real terms to 2.2 per cent in 2017, before rising to 3 per cent in 2018.
Over in the life sector, global premiums are expected to grow by 4.8 per cent in 2017 and 4.2 per cent in 2018.
Emerging Asia would be the main driver of premium growth in both the non-life and life sectors, the report said.
Of the major economies, the United States is expected to grow by slightly more than 2 per cent in inflation-adjusted (real) terms annually over the next two years.
"The election of Donald Trump as president-elect was not explicitly incorporated into the US forecast, but this development is unlikely to have a major impact on insurance markets over the next two years. The euro area and the United Kingdom are forecast to grow by about one per cent and 1.5 per cent, respectively, while Japan should grow by less than one per cent. China is expected to grow by around 6.5 per cent," the report noted.
Monetary policy would remain accommodative for the next two years, even as the US is expected to gradually raise rates.
Other central banks are expected to keep their policy rates and quantitative easing policies intact.
With the US Federal Reserve raising rates, US 10-year government bond yields would likely rise, pulling yields in Europe slightly higher.
Said Kurt Karl, Swiss Re's chief economist: "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
- Singapore insurance sector
- Singapore life insurance
- Singapore general insurance
- Global insurance