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Growth in the life sector helped to lift worldwide insurance premiums in 2006, according to a report Monday from Swiss Reinsurance Co.
Global insurance premiums increased by more than 5% in 2006 to $3.723 trillion. Of that figure, $2.209 trillion was attributed to life business and $1.514 trillion was attributed to nonlife business.
While profitability improved for the industry overall, growth accelerated at a faster pace in the life sector; life premiums increased by 7.7% over the prior-year period, while nonlife premiums grew by 1.5%, the study said.
Western Europe accounted for most of the growth in the life insurance market, with particularly strong premium growth in the United Kingdom, France and Germany. Several Asian markets also saw significant growth, including South Korea, Hong Kong, China and India.
Stepped-up demand for retirement products in countries with aging populations, together with the efforts of governments to shift from public to private pension plans, boosted demand for the life industry's products, Zurich, Switzerland-based Swiss Re said.
"These positive developments were partly offset by declining premiums in Japan," the report noted.
Momentum was slower on the nonlife side. "Downward pressure in rates, particularly in noncatastrophe lines of business, was the salient feature of the market and could not be offset by higher demand," the report said.
The outlook for the remainder of 2007 suggests healthy premium growth in the life insurance sector and sluggish premium growth for the nonlife sector.
A copy of the study is available at www.swissre.com/sigma.