Global premiums forecast to increase 3.4% in 2021: Swiss Re
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Global insurance premiums are expected to grow by 3.4% in real terms in 2021, taking global direct premiums written in 2021 to 8% above the 2019 level, and global insurance premiums should exceed $7 trillion for the first time by mid-2022, Swiss Re Ltd. said in a report Wednesday.
Growth is expected to continue at 3.3% in 2022 and 3.1% in 2023, driven by “rising risk awareness in both the life and nonlife segments,” and ongoing rate hardening in commercial insurance lines will provide further support, Swiss Re said.
The rising risk awareness was one lesson learned from the pandemic outbreak, Swiss Re said. “Rising risk awareness is generating demand for more insurance protection,” Swiss Re said.
North America will contribute $113 billion annually in 2022 and 2023 to the global commercial premium pool.
Insurance sector profitability, however, has come under pressure in 2021, “as the industry absorbs COVID-19-related claims, above-average catastrophe losses and high inflation,” although a “strong rebound” is expected in 2022 for commercial underwriting profitability as rates in commercial lines rise again and insurers factor in inflation.
“Nonlife insurers’ profitability is expected to significantly recover despite inflation’s medium-term risk to profitability,” Swiss Re said.
Recovery from the pandemic and resulting economic downturn will be “uneven,” said Swiss Re, which forecast global real economic growth of 5.6% in 2021, 4.1% in 2022 and 3.0% in 2023.
Growth will be bolstered by adopting digitalization, Swiss Re said. “The adoption of digital technology throughout the economy including digital infrastructure is key to higher productivity growth.”
Some of the digitalization adopted as remedy during the pandemic has proved popular and productive. “Consumers welcome digital and online insurance and it should grow rapidly,” said Swiss Re.
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