The global insurance industry grew again in 2015, but the outlook is mixed according to experts.
Swiss Re has released its
sigma report on the global insurance industry, and, in terms of global insurance premium growth, business is up. Global insurance premium growth increased to 3.8% in 2015, up from 3.5% in 2014. The figures come during an environment of moderate global economic growth, a key driver in insurance demand.
Despite the positive overall growth figure, life premium growth slowed to 4% from 4.3% in 2014 largely thanks to weaker performance in advanced markets. Overall life premium real growth in advanced markets slowed to 2.5% in 2015, well down from 3.8% posted the previous year. The biggest slowdown was seen in Western Europe, where growth dropped to 1.3% from 5.8%. The positive news came from emerging markets, particularly in Asia, which nearly doubled its growth over the previous year to 12%.
The report also highlighted the impact of low interest rates on the industry, putting pressure on both the life and non-life sectors.
Kurt Karl, chief economist at Swiss Re, said interest rates and the macroeconomic and financial market environments will continue to shape the outlook for the insurance industry.
"With profitability under pressure, life insurers will continue to focus on improving capital management, lowering expenses and enhancing investment yields,” he said. “Profitability in non-life will also remain subdued on still-low investment returns and soft pricing conditions."
The report also stated the insurance industry overall is well capitalised, meaning insurers are better able to withstand periods of market turmoil.
Going forward the report stated global trade slowdown will likely impact marine and credit premium growth.
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