May 31, 2016 by Canadian Underwriter
The global property and casualty insurance market is forecast to grow at a compound annual growth rate (CAGR) of 5.77% during the period of 2016 to 2020, according to a new report from Research and Markets.
The report from the market research store, released on Tuesday and titled Global Property and Casualty Insurance Market 2016-2020, covers the present scenario and the growth prospects of the global market during those years. To calculate market size, the report considers the net premiums earned from the P&C market in the Americas, Asia Pacific and EMEA (Europe, the Middle East, and Africa). It has been prepared based on an in-depth market analysis with inputs from industry experts, Research and Markets said in a press release.
According to the report, a key growth driver in the market is the change in customer demographics and economic recovery. The shift in demography has pushed many insurance firms to make use of actuarial and sales model for better pricing and the rise in population of Baby Boomers and the emerging Generation Y (Millenials) are sparking growth opportunities for different insurance products, noted an information statement from Research and Markets.
“It is estimated that a slowdown in the population of insurance buyers may cast a dampening effect on the growth of the insured value for personal line insurance,” the information added. “Growing populations, the expansion of industrialization, the surge in global commercial and entrepreneurial operations, growth in consumer awareness regarding insurance products, and rising disposable incomes across different regions of the globe are forcing the pace of change in the insurance industry. Therefore, brokers that act as intermediaries between the insurer and the insured and insurance companies provide both insurance security support to customers, in addition to various other personalized services.”
The report also suggests that one challenge that could hamper market growth is the number of risk variables in the underwriting process.
“An emerging trend in the insurance market is the use of big data analytics,” an analyst from the research team said in the statement. “Many insurance companies are focusing on expense management in a bid to increase profit margins. This is possible only through the application of technology.”
The analyst went on to say that many P&C insurers are also shifting their focus from standalone technology projects to an environment where there is “continuous technological improvement.” Top vendors are executing mergers and acquisitions and joint ventures to reduce costs and ensure smooth integration between data mining and organizational resources, making it important that P&C insurance vendors formulate strategies to attract customers.
“This can be possible only through multiple distribution and communication channels,” the analyst concluded. “Many top property and casualty insurance vendors are making use of cost-effective solutions in infrastructure, communications and analytics.”