Global non-life insurance direct premiums will grow moderately over the next few years, Swiss Re predicts in a new report. A surging emerging market is expected to generally balance out stagnant and declining overall numbers generated in advanced markets.
Advanced market non-life insurance direct premiums will expand by 1.7 percent in 2014, 1.4 percent in 2015 and 1.6 percent in 2016, after growing by 1.9 percent in 2013, Swiss Re said.
Those results contrast from emerging market expectations. Direct premium growth in this sector should hit 8.1 percent in 2015 and 8.7 percent in 2016, after growing 5.5 percent in 2014. That contrasts with an 8.2 percent increase in 2013, according to the report.
In the advanced market side of things, the United States expects a steady slide in non-life insurance premiums over the same period. Swiss Re believes this number will grow just 0.8 percent in 2015 and 0.06 percent in 2016, down from an anticipated 2.1 percent growth in 2014 and 3.2 percent in 2013, the report noted. Similar declines are expected in Canada, and Germany. Dips are also expected in Japan, Australia, the United Kingdom and Italy, though Swiss Re sees them rebounding into 2015 and 2016.
On the emerging market side, Swiss Re said “emerging Asia” should have pretty strong non-life insurance direct premium growth, with 12.5 percent, 12.8 percent and 12.9 percent expected through 2014, 2015 and 2016, respectively, versus 12.2 percent in 2013. Africa and the Middle East should also see healthy gains. Latin America, Africa and Eastern Europe will see rate hike declines in 2014 before bouncing back in 2015 and 2016, according to the report predictions.
Reinsurers will have a tougher time of it over the same period, however, Swiss Re said. Premium growth in this sector should be slower than the non-life primary insurance side, largely due to a drop in reinsurance buying in China and the continued softening of property casualty reinsurance rates. After 2015 renewals, however, Swiss Re expects “the pace of decreases” to slow down and the demand for net cat capacity to continue to increase.
One bright spot: aviation rates should continue to improve through 2016 “as the market reacts to recent loss activity,” Swiss Re said.
Source: Swiss Re