The Swiss Re Institute has today published its annual world insurance premium publication sigma. The world insurance sigma report has been considered by many to be the premier source of insurance premium data since 1968. The report includes premium volumes by country, penetration rates, insurance density and key macroeconomic indicators. The report also contains in-depth analysis of the economic and societal context shaping the insurance industry.
The 2021 report forecasts that the strong global economic recovery from COVID-19 will lead to historically high global real gross domestic product (GDP) growth of 5.8% in 2021. Global insurance premiums are set to follow this strong growth, according to the Swiss Re Institute’s findings in the report, increasing by an expected 3.3% in 2021 to a total of USD 6.9 trillion. The report forecasts 3.9% insurance premium growth for 2022. In 2021, key market insurance premium growth is forecast at 6.3% for China, 1.7% for the US, 2.8% in Western Europe and 5.6% for emerging markets.
The report examines how factors such as inflation and digitalisation are influencing insurance industry development. A key opportunity for insurers according to the Swiss Re Institute is the positive development in consumer awareness, which has been cemented by the COVID-19 pandemic. The report highlights how global health and protection-type insurance premiums grew by 1.9% and 1.7%, respectively in 2020, as the pandemic increased awareness of the value of health and protection-type products.
Jerome Haegeli, Group Chief Economist at Swiss Re Institute said: “We expect the insurance industry to earn a record USD 7 trillion in premium by end of next year. The best preparation for the next economic shock is having economic buffers in place. However, fiscal and monetary buffers are being depleted, which means the private insurance sector is increasingly important. Narrowing protection gaps needs to become an economic policy goal.”
Haegeli continued: “The economic upswing expected in 2021 and 2022 is on track to materialise, and this is a key factor for insurance premium growth across the globe. The main market to watch is China, where both economic and premium growth continue at a strong pace. Consumer awareness is clearly an important growth driver and this has been driven by the pandemic. Whether it is private medical insurance or supply chain interruption for businesses, people have become much more aware of what insurance is, and how it can help them to emerge resilient from such a crisis.”
Download the publication here.