The global property insurance market reached $360.5 billion in gross written premiums as of the end of 2014, according to a new Finaccord survey. And personal property premiums are outpacing commercial business.
Of that premium total, $195.8 million, or 54 percent of the total, encompassed personal property premiums, mainly household or homeowners policies bought by individual consumers. The rest—at $164.6 billion, or 46 percent of the total—reflects commercial property insurance premiums, or policies bought by corporate, business, public sector and not-for-profit customers, the survey noted.
The U.K.-based consulting firm calculated that the global market grew at 4.7 percent annually since 2010 (2.9 percent adjusted for inflation), when premiums were worth $300 billion.
At $150.1 billion, the U.S. had the most global property insurance gross written premiums in 2014. France came in second, with $22.6 billion. Germany landed in third place, with $22.2 billion in gross written premiums, Finaccord managing consultant David Parry noted in prepared remarks.
Parry said that the markets of Argentina, Turkey and the Philippines grew the most rapidly between 2010 and 2014, at compound annual growth rates of 29.6 percent, 17.8 percent and 16.3 percent, respectively. However, once national inflation rates have been accounted for, the fastest-growing markets were those of the Philippines, Thailand and China, with respective real compound annual growth rates of 13.1 percent, 11.3 percent and 11.1 percent.
The report also noted that distribution of personal and commercial business in property insurance markets varied widely between different countries. In 2014, for example, household/homeowners insurance premiums accounted for the highest proportion of the total market in Australia at 69.1 percent. They were lowest in China at just 4.2 percent.
The reason for the variation? In Australia, there is a relatively high rate of household/homeowners insurance penetration. The opposite scenario exists in China, which has a large agricultural insurance sector, according to Finaccord, which noted that less mature insurance markets typically have a dominant commercial property cover.
Parry said that household insurance policies may be outpacing commercial property on a global level for reasons including the emergence of more effective distribution channels for marketing household cover to individual consumers, as well as soft market conditions for commercial property insurance in many parts of the world.
Finaccord said the global property insurance market should increase at slightly slower nominal and real compound annual growth rates between 2014 and 2018 than it did between 2010 and 2014. Expectations are that it will reach a value of around $421.2 billion by 2018, or $393.5 billion when inflation is factored in.
Parry added he expects property insurance markets in the Philippines, Thailand and Indonesia to grow the most through 2018. As well, he said, household insurance will continue to outgrow commercial property insurance, with an expected growth to more than 55 percent of the global market by 2018. Nearly half of that value, he said, will be generated by the United States.