China was the driving force behind nearly half of the growth in the world insurance market in 2016, as initial projections indicated global insurance premiums rose 4.4% to €3.65 trillion ($3.89 trillion), German insurer Allianz S.E. said Monday.

Remove China from the equation, and the insurance world would have seen 2.7% growth, Munich-based Allianz said in a statement.

The so-called "China effect" was particularly pronounced in the life insurance sector, due to its rapid growth in China and a slump in life insurance in other parts of the world, Allianz said. 

Allianz said its projections suggest that Western Europe achieved “very solid growth” of 2.1% last year, only the second time since the 2007 financial and euro crises — behind 2015 — that growth in the property/casualty business has managed to climb back past the 2% mark again. Overall, the insurer said, the Western European insurance market stagnated, with its share of the global market contracting further to around 27% in 2016, compared with 36% 10 years ago

A handful of markets, including Italy and Japan, reported negative growth rates in 2016. Global gross written premiums in the property/casualty segment are likely to have increased by 4%, Allianz said, the weakest figure since 2010, after five years of growth averaging more than 5%.

The company noted that both the global economy and global trade saw a drop in momentum last year.

China’s property/casualty insurance market felt the impact of the economic slowdown, reporting 9% growth, the first time it had slipped below 10% since the 1990s. Allianz said this indicates that the global trend is much less reliant on China in the property/casualty segment — historically less volatile than the life sector — with only one-fifth of last year's global growth attributable to the Chinese market.
 
Allianz said the advancement of China and other emerging markets is gradually eroding Western Europe's weight on the global market. This does not apply to the same extent to the North American market, the company said, whose share of the global market has been relatively stable at around 33% for some years now.

“Although the North American market share is also lagging behind the pre-crisis level, the drop is less dramatic,” Allianz said in the statement. “This also becomes clear in a direct comparison: Whereas at the start of the millennium, the insurance markets in North America and Western Europe were virtually neck-and-neck in terms of total premium income, today's North American market is around 20% bigger.” 

Germany's share of the global insurance market has been whittled down to 4.2% last year from 6% at the start of the millennium, Allianz said. Germany is in third place in Europe, behind the United Kingdom and France, the company said.