The global insurance industry is forecast to reach a new record in global premiums by mid-2022, exceeding US$7trn, supported by heightened risk awareness in both the life and non-life segments in wake of COVID19, as well as continued strong rate hardening in commercial lines.
This is according to the latest Sigma study from Swiss Re Institute, which describes a market rebound that reflects the resilience of the insurance industry.
“The economic recovery we are experiencing is cyclical and not structural, with macroeconomic resilience weaker today than before the COVID19 crisis. As such, we should be anything but complacent,” said Jerome Haegeli, Swiss Re group chief economist.
“Given its capacity and expertise to absorb risks, the insurance industry is crucial in making societies and economies more resilient. Yet for inclusive and sustainable growth, everyone must be on board. Green growth is sustainable only if it is also inclusive. We have a unique opportunity to build a better market system. For this, all stakeholders will need to accept and internalise the costs of climate change, and policymakers to take into account the distributional effects of their economic policies across their populations. This will help to create the transition we need for a sustainable path to a net-zero economy by 2050.”
Global GDP growth is expected to be strong in 2021, at 5.6%, slowing to 4.1% in 2022 and 3.0% in 2023. Inflation is the prevailing near-term macro risk, fuelled by the energy crisis and prolonged supply side issues. The price pressure is expected to be most acute among emerging markets and in the UK and US.
Swiss Re Institute estimates that global non-life premiums will grow by 3.3% in 2021, 3.7% in 2022 and 3.3% in 2023. Property-catastrophe rates are forecast to improve in 2022 after a year of above average losses.