A London-based market research firm projects that global non-life gross written commercial insurance premiums will reach a value of around $895.1 billion by 2018, with U.S. commercial liability insurance driving higher growth rates than in past years.
Finaccord, a market research, publishing and consulting company specializing in financial services, included the forecast in a research study titled, “Global Commercial Non-Life Insurance: Size, Segmentation and Forecast for the Worldwide Market.”
“Worldwide, we expect commercial liability insurance premiums to increase at more than three times the rate of commercial motor, commercial property and commercial MAT [marine, aviation and transport] premiums through to 2018,” said David Parry, Managing Consultant at Finaccord, in an announcement about the research report.
“This will essentially be a result of liability insurance growth in the United States, which constitutes more than half of the global commercial liability insurance market. While the commercial motor and property insurance markets are stable in the U.S., liability premiums continue to grow strongly, especially for workers [compensation] insurance,” he said.
Compiling premium figures for the recent past, Finaccord said the value of commercial property/casualty insurance premiums was $728.6 billion globally in 2014, with the global market size rising at a nominal compound annual growth rate of 5.1 percent since 2010, when global gross P/C premiums were $596.3 billion. In real terms (adjusted for inflation), this growth rate was 3.0 percent, Finaccord said.
Breaking down the global 2014 figures by market segment, Finaccord said:
- $210.3 billion, or 28.9 percent of the total, was in commercial motor insurance premiums.
- $518.3 billion, relates to commercial liability and property cover other than auto.
By geography, Finaccord offers the following breakdown of 2014 gross commercial premiums:
- U.S., 266.0 billion,
- China, $63.1 billion
- Germany, $33.7 billion
Across the 40 major markets analyzed in depth by Finaccord, the markets that grew most rapidly between 2010 and 2014—in nominal terms–were Argentina, Turkey and Thailand with compound annual growth rates of 34.6 percent, 18.3 percent and 16.0 percent, Parry reported.
Accounting for national inflation, the ranking changes, with Thailand, Turkey and the Philippines becoming the fast growers, with respective real compound annual growth rates of 13.7 percent, 10.0 percent and 9.5 percent.
According to Finaccord, the composition of commercial non-life insurance markets between different lines of business varied substantially between different countries based on its analysis of 2014 premiums.
- In China, commercial motor insurance premiums accounted for the highest proportion of the total national commercial lines market at 58.8 percent.
- In Australia, commercial liability and commercial property premiums accounted for 57.1 of premiums.
- Commercial MAT insurance represented the highest proportion of the total national commercial lines market in Norway, at 33.8 percent.
Parry explained that the maturity of each market and national regulations shape the composition of coverages by country. For example, since the shipping and energy sectors are both very important parts of Norway’s economy, this makes the MAT insurance line unusually large, he said. He also explained that workers accident drives the large commercial P/C proportion in Australia where premiums are paid to public sector insurance schemes (often administered by private sector insurers).