The global insurance market will grow strongly in the years to come, especially in emerging countries, according to Munich Re.
Growth in the reinsurance market will be slower than that in the primary insurance industry, Munich Re’s Insurance Market Outlook 2013 finds.
“The global economic recovery is also benefiting the insurance industry. We expect the economies of key industrialized countries to improve in the second half of 2013 and in 2014. Consequently, this will lend impetus to demand for insurance,” Michael Menhart, Munich Re’s chief economist, said.
Until 2020, the property-casualty market as a whole will grow by approximately 50%, compared to 2012, to €1.85 trillion, according to Munich Re’s estimates. Growth in insurance and reinsurance in emerging countries will be significantly stronger than in industrialized countries. At print time, one euro was worth $1.32.
The mature markets in North America, Western Europe and the industrialized countries of the Asia/Pacific region remain the dominating growth force. Their share will fall back to about 73% by 2020, around 10 percentage points lower than in 2012 for total primary insurance premiums. The share generated by emerging countries in Asia will move up to 16% from 8%.
“Approximately half of all the additional premium earned between 2013 and 2020 will come from the USA, China and Japan. In this respect, saturated markets and emerging markets both represent great potential for growth in insurance and reinsurance alike,” Menhart said.
The premium growth forecast for the global primary insurance market is just under 3% in 2013 and just over 3.5% in 2014. The market grew by around 1% in 2012. The chief reason for the expected growth is the predicted revival of life insurance, Munich Re reported.
In reinsurance, growth was high in 2012 at 3.3%, due partly to rate increases following severe natural catastrophes in the previous years. Growth of roughly 1% is likely in 2013 and around 2.3% in 2014, with greater predicted growth in life reinsurance than in property-casualty reinsurance.
Also in the short term, the emerging countries hold the greatest growth potential for the insurance industry. In the property-casualty segment, the strongest growth can be expected in Asia. Europe trails behind all the other regions in terms of growth in both property-casualty and life insurance.