Swiss Re forecasts insurance market premium growth to continue, driven by increased exposures, risk awareness and evolving client needs.
According to Swiss Re Institute, non-life insurance premiums are expected to be 10% higher than pre-COVID levels by the end of this year.
Heightened risk trends will increase the need for insurance protection, but also require a greater focus on evaluating and modelling, and ensuring pricing is adequate for the risks taken.
“There is a clear recognition that claims’ frequency and severity is rising as demonstrated by recent natural catastrophes or cyber incidents,” said Swiss Re’s CEO of reinsurance, Moses Ojeisekhoba.
“This means the need for protection is growing, and the industry has important work to do in offering insurance and closing the protection gap. Swiss Re’s extensive risk knowledge and very strong capital position allow us to support our clients in their growth ambitions.”
Climate change poses the biggest long-term threat to the global economy. According to Swiss Re Institute, the world economy is set to lose up to 18% of gross domestic product from climate change by 2050 if no mitigating actions are taken.
While climate change is a real threat, it also poses the largest growth opportunity to the industry as major investments will be necessary. According to Swiss Re Institute, to achieve the 2030 agenda for global sustainable development, investments in the order of US$6.9trn a year will be required.
Re/insurers also need to prepare for elevated inflation risks.