Life, non-life insurance sectors show different growth rates

Life and non-life insurance sectors showed entirely different developments in 2005, a Swiss Re annual study of the global insurance market found.
In 2005, the worldwide insurance industry wrote premiums to the tune of US$3.4 billion. According to a Swiss Re sigma study, life insurance grew by 3.9% whereas non-life insurance grew by only 0.6%.
The report speculated on why the non-life insurance market experienced subdued growth.
“The non-life sector continued to face rather saturated markets,” the study said. “Premium growth, which had previously been spurred by price increases, dropped to almost zero in 2005.
“Outside the U.S., retained profits and insurers’ better stock market valuations led to increased insurance availability and heated up price competition in some countries.”
Profitability nonetheless improved in 2005, the report states, because “cost control and underwriting discipline yielded positive technical results for insurance companies.” In life insurance, on the other hand, “the trends towards increasing life expectancy and governments shifting social security over to private systems were the main growth drivers,” the report said. “In 2005, life insurers sold considerably more annuity products than in the previous years.”
Life insurers benefited from favorable stock markets, which fuelled unit-linked policies sales, the sigma study suggests. “And the growing loan market generated more mortgage-related life insurance policies. Life insurers’ profitability and their financial strength improved.”