Having gazed deep into the industry's crystal ball,
Munich Re’s Insurance Market Outlook for 2014 has made some bold predictions for the Canadian and worldwide markets.
According to the report, real growth in the worldwide primary property and casualty insurance is expected to pick up this year and in 2015, while Canada is expected to remain the ninth largest market in 2020.
“In Canada, growth in P&C premiums in 2014 and 2015 is expected to be slightly below the level of economic growth,” states Munich Re. “In the U.S.A., sustained rate increases led to sound premium growth in 2013. A positive cyclical effect should still be seen in 2014, but will then ease off. Nevertheless, because of the good economic outlook, premium growth should still be relatively strong in 2015 as well.”
The market outlook provides estimates of premium growth by region. Worldwide, Munich Re is predicting primary P&C premiums will increase by 3 per cent in 2014 and 3.2 per cent in 2015. Primary P&C premiums grew by 2.8 per cent in 2013, both in North America and worldwide.
“In reinsurance,” states Munich Re, “we are expecting moderate growth averaging 2 per cent (in real terms) up until 2020.”
The highest growth rates are in emerging markets in Asia — with actual growth of 11.7 per cent in 2013 and projected growth of 9.9 per cent and 9.8 per cent in 2014 and 2015 respectively.
The lowest growth is in Western Europe, with a real drop of 1.2 per cent in 2013 and projected growth of 1 per cent and 1.2 per cent in 2014 and 2015 respectively.
The report also lists the top 15 primary insurance markets for 2006, 2013 and Munich Re's projection for 2020. (continued.)
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The United States is in first place and Canada is in ninth place for each of 2006, 2013 and 2020.
Primary P&C premiums in Canada were $102.87 billion in 2006, $138.65 billion in 2013 and are estimated at $180.39 billion in 2020.
In the United States, primary P&C premiums were (US)$1.182 trillion in 2006, (US)$1.236 trillion in 2013 and are projected at (US)$1.65 trillion in 2020.
In 2013, Canada ranked behind the U.S., Japan, Britain, China, France, Germany, South Korea and Italy. The 2020 rankings are projected to be the same except China will take third place and Britain will be take fourth place.
