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Global commercial P&C insurance market on track to be worth US$895.1 billion by 2018: Finaccord


December 3, 2015   by Canadian Underwriter


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The worldwide commercial non-life (P&C) insurance market is set to be worth US$895.1 billion in gross written premiums by 2018, with premiums for commercial liability cover forecast to grow most rapidly, according to a new research study released on Thursday by Finaccord, a market research, publishing and consulting company specializing in financial services.

Worldwide, the value of commercial P&C insurance premiums in 2014 was US$728.6 billion

Worldwide, the value of commercial P&C insurance premiums in 2014 was US$728.6 billion, Finaccord noted in its report titled Global Commercial Non-Life Insurance: Size, Segmentation and Forecast for the Worldwide Market. The global market size has risen at a nominal compound annual growth rate of 5.1% since 2010, when premiums were worth US$596.3 billion, though this growth rate was 3% in real terms (adjusting for inflation).

In total, in 2014, the worldwide market value broke down between US$210.3 billion (28.9% of the total) in commercial motor insurance premiums (the largest single segment of the global market) and US$518.3 billion in premiums for all other types of commercial non-life insurance including, most notably, commercial liability and property cover.

“At a respective US$266 billion, US$63.1 billion and US$33.7 billion in gross written premiums, the U.S., China and Germany were the world’s largest commercial lines markets in 2014,” said David Parry, managing consultant at Finaccord, in a statement. “Meanwhile, in nominal terms, and across the 40 major markets analyzed in depth by Finaccord, the markets that grew most rapidly between 2010 and 2014 were those of Argentina, Turkey and Thailand with compound annual growth rates of 34.6%, 18.3% and 16.0%, respectively. However, once national inflation rates have been accounted for, the fastest-growing markets were those of Thailand, Turkey and the Philippines with respective real compound annual growth rates of 13.7%, 10.0% and 9.5%.”

Other countries covered included Australia, Canada, China and the United Kingdom, among others. In 2014, countries apart from the 40 investigated accounted for 9.8% of global commercial non-life insurance premiums.

Another study finding is that the composition of commercial non-life insurance markets between different lines of business varies substantially between different countries. In 2014, commercial motor insurance premiums accounted for the highest proportion of the total national commercial lines market in China at 58.8% while commercial liability and commercial property premiums peaked in Australia (57.1%) and Sweden (44.6%), respectively. As for commercial marine, aviation and transport (MAT) insurance, this represented the highest proportion of the total national commercial lines market in Norway (33.8%).

Looking ahead, Finaccord’s research indicates that the global commercial non-life insurance market is likely to increase at slightly faster nominal and real compound annual growth rates between 2014 and 2018 than it did between 2010 and 2014. The result is that it will reach a value of approximately US$895.1 billion by 2018, which converts to US$824.5 billion when deflated in line with forecast inflation rates.

“Worldwide, we expect commercial liability insurance premiums to increase at more than three times the rate of commercial motor, commercial property and commercial MAT premiums through to 2018,” concluded Parry. “This will essentially be a result of liability insurance growth in the U.S., which constitutes more than half of the global commercial liability insurance market. While the commercial motor and property insurance markets are stable in the U.S., liability premiums continue to grow strongly, especially for workers’ accident insurance.”


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