Emerging markets, particularly China, are driving commercial insurance growth globally, according to a new sigma study released Wednesday by Swiss Re Ltd.

Property/casualty global premiums rose by 3.7% in 2016, with China and other emerging markets leading the way, according to the report, “World insurance in 2016: The China Engine Steams Ahead.”

“Premium growth in the emerging markets was solid at 9.6%, with the outcome heavily skewed by China where non-life premiums were up 20%,” the report said.

Property/casualty premium growth in 2016 was down from a 4.2% gain in 2015 but was above the 10-year average of 2.0%, according to the report.

Despite emerging markets continuing to drive global premium growth, stronger activity in advanced economies will also boost sector growth, the report said.

Advanced economies remain the largest insurance markets, with such economies accounting for $3.8 trillion of global premium of a total $4.7 trillion in 2016, the report said. The U.S. is the largest market, Japan second, and “One cannot ignore the growing significance of China, however, now the third largest insurance market in the world,” the report said.

Profitability declined in 2016, the report said, in a sample of eight key markets — U.S., Canada, the U.K., Germany, France, Italy, Japan and Australia — as the sector’s return on investment fell to 6.2% from 8.1% in 2015, due largely to “weaker underwriting results and lower investment earnings due to declining interest rates.” The overall combined ratio for the eight markets deteriorated from 97.8% in 2015 to 99.9% in 2016, the report said.

Non-life sector growth will remain “moderate,” the report said in its outlook, “supported mainly by improved activity in the advanced economies.”

North American premium growth is forecast to improve in 2017, “supported by a strengthening economy and higher interest rates in the US.”

Emerging economies, meanwhile, are forecast to see “robust” property/casualty premium growth, with China again the engine, “supported by the continuing efforts of the Chinese government to increase insurance penetration,” the report said.