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Member, Beacon International Group, Ltd.
Global nonlife insurance premiums grew 2.1% to $1.819 trillion in 2010, Swiss Reinsurance Co. Ltd. said in a sigma study released Wednesday.
The study, World Insurance in 2010, says nonlife insurance premiums in the United States increased 0.2% to $660 billion in 2010 compared with 2009.
For emerging markets, such as Latin America, Central and Eastern Europe, the Middle East and Central Asia, premiums increased 8.4% to $286 billion.
For the eight largest nonlife insurance markets in the world—Australia, Canada, France, Germany, Italy, Japan, the United Kingdom and the United States—insurers' average combined ratio was 103% last year, up from 101% the previous year.
Catastrophe losses
“Given recent catastrophe loss events, it is clear that global underwriting results will deteriorate further in 2011. This indicates that prices are inadequate,” Daniel Staib, a co-author of the report, said in a statement. “In some markets, such as Italy and the United Kingdom, rates began to mount, most notably in the personal motor business, signaling that the underwriting cycle is at long last beginning to turn,” he said.
Natural catastrophes cost the global nonlife insurance industry about $40 billion in 2010, with man-made disasters causing a further $3 billion in losses, Zurich-based Swiss Re said in the sigma report.
Rate hike pressure
While the final costs of the devastating earthquakes in Japan and New Zealand earlier this year are not yet known, they likely will add to pressure on insurers to increase rates, according to the study.
Some insurers could see adverse reserve development in 2012 after several years of reserve releases, the report added.
The overall aftertax return on equity for global nonlife insurers was 6% last year, “slightly higher” than in 2009, according to Swiss Re's study.
Global life insurance premiums rose 3.2% to $2.52 trillion, Swiss Re said. Total insurance premiums for the year increased 2.7% to $4.339 trillion, Swiss Re said in the report.