P/C business lags pack in 2005 growthPosted On: Oct. 15, 2006 12:00 AM CST
ZURICH, SwitzerlandWhile life insurance business grew faster than overall economic activity in many countries around the world in 2005, property/ casualty business slowed last year, with premium growth in many countries slower than the rise in gross domestic product, according to a study.
Swiss Reinsurance Co.'s sigma report, "World Insurance in 2005: Moderate Premium Growth, Attractive Profitability," found that worldwide insurance premiums amounted to nearly $3.43 trillion in 2005, with more than $1.97 trillion of that in life and more than $1.45 trillion from property/casualty.
Total premium volume increased 2.5% last year, according to the Swiss Re study, with life premiums up 3.9% and P/C premiums increasing 0.6%. Profitability in life insurance improved, Swiss Re said, while P/C business remained "very profitable" despite U.S. hurricane losses.
Swiss Re said it sees the growth on the life side as consistent with an overall trend toward an increased recognition of the importance of life insurance. The pace of life insurance growth in the United States lagged the rest of the world in 2005, according to Swiss Re, as higher short-term interest rates made life products less attractive. In some countries such as Germany, changing tax treatment of life insurance was responsible for a drop in life premiums.
On the P/C side, Swiss Re cited a decline in premium rates as the main cause of the market's slowed growth last year, primarily in commercial lines areas such as aviation and marine, which had seen significant increases from 2001 through 2004.
The Swiss Re sigma study is available online at www.swissre.com/sigma.