Global insurance premium volume (excluding health insurance), rose to a record-high €3.66 trillion in 2017, up 3.7% from the previous year, a report by Allianz Research has revealed.
More than three-fourths, or 76%, of the growth was attributed to Asia.
Property and casualty (P&C) insurance was the segment with the highest global growth last year, at 5%, almost twice the growth of life insurance at 2.8%. It was also the P&C segment’s largest growth period since 2012.
However, the regional differences were quite striking, with Western Europe growing by just 2%. Meanwhile, Asia (excluding Japan) grew by 10.2%, with India as the top-performing market with growth exceeding 30%. Meanwhile, Singapore is currently third worldwide in terms of premiums per capita, trailing Switzerland and Denmark. The Lion City’s premium growth is pegged at 5% annually over the next decade.
The region also played a major role in life insurance growth, with premiums increasing by 14% in Asia excluding Japan. China was the heavy lifter in terms of life insurance growth, with 80% of all new premiums coming from the market, which is the second-largest in the world and is expected to rise to first place in the coming years.
“Asia is setting the pace for insurance markets, in particular in life,” said Michael Heise, chief economist at Allianz. “The development is nothing less than amazing. This is part of a broader trend - the region succeeded in transforming high growth rates into mass wealth. The new Asian middle class is now not only driving insurance markets, but many consumer markets. Asian savers and shoppers are the growth engine for the world economy.”
Allianz Research predicts the global insurance market will continue its recovery in the coming years, with premium growth forecasts reaching around 6% in the next decade. This is a reflection of the global economy’s return to normal growth and inflation rates. Again, Asia excluding Japan is the star, with the region foreseen to grow 11% per annum over the next decade.
By the end of the 2020s, around 40% of global insurance premiums will be written in the region, predicted Allianz, compared to just 10% 10 years ago.
“Global insurance markets are undergoing fundamental changes,” said Kathrin Brandmeir, economist at Allianz Research. “However, from our point of view, this disruption also offers great opportunities. With the new technologies, insurance cover can be made accessible and tangible for more people, and insurance products can become more attractive. If we succeed in getting customers so enthusiastic about insurance that they would again spend as much of their income on insurance cover as before the crisis, global premiums could be about €1 trillion higher at the end of the next decade than in our baseline scenario.”
