Stagnant premium growth key issue for coming decade

Negative or stagnant premium growth will be a key issue for property and casualty insurers in industrialized countries, including Canada, during the next 10 years, says Standard & Poor’s.
In its report, The Key Issues for Property/Casualty Insurers During the Next 10 Years, S&P’s points to a Swiss Re sigma study that found industrialized countries exhibited a non-life premium growth rate of -0.3% in 2007, while emerging markets increased at a rate of 10.2%.
“Most developed insurance markets are relatively well saturated with global and national insurers as well as regional and local players competing for business,” S&P’s said in its report.
“As a result, we expect the majority of premium growth to come from outside the industrialized countries, with companies that have access to emerging markets or better distribution capabilities growing faster than other companies.”
Those countries that will grow at a rate faster than the industry as a whole may have a smaller starting base, new products or mergers and acquisitions, S&P’s continued, adding that it believes a significant amount of organic growth is unlikely in the next few years. 
“About 88% of the global insurance market premiums are based in industrialized locations, which had virtually no growth in 2007, and 2008 seems to have followed a similar pattern.”
Other key issues likely to affect insurers, according to S&P’s, include:
•    shifting populations forcing insurers to focus on different geographic areas;
•    increasing terrorism risk;
•    the influence of natural catastrophes on pricing cycles; and
•    increasing regulation and government intervention.