Non-life premiums decline slightly: Swiss Re

Non-life insurance premiums declined only marginally in 2008, by 0.8%, mainly due to lower demand for cover and softening rates, according to a Swiss Re sigma study.
In industrialized countries, non-life premiums fell 1.9%. Growth in the emerging markets remained strong at 7.1%, compared to 2007, the study World insurance in 2008, reveals.
“At the same time, underwriting results in non-life remained equally positive in most markets, despite very high losses from natural catastrophes,” according to a Swiss Re release. “Towards the end of the year, rate increases were observed in selected countries and lines of business.”
In Canada, non-life premiums increased 0.4% to US$57 billion.
In non-life, real premiums are expected to remain flat in 2009, since the economic downturn is likely to curb demand, particularly in the commercial lines of business.
Demand for personal lines of insurance, for example motor, is likely to be less affected, since insurance spending is less discretionary, particularly in the industrialized markets,” Daniel Staib, a sigma author, said. “Nevertheless, the economic situation will also impact this segment.
“While it is expected that the recession will reduce demand for insurance cover, capital shortages will support the upward movement of prices. Furthermore, demand for additional cover should increase in 2010 along with the economy.
“Profitability in non-life is likely to improve, mainly due to rising prices and stronger investment results.”