The global economy is slowly recovering from the Covid pandemic. The vast and rapid availability of vaccines worldwide, along with the motivation to bounce back, caused an increased unprecedented fiscal stimulus than predicted in 2020.
The current growth momentum benefits insurance demand, with inflation remaining a consistent concern. As countries prepare themselves to reopen, optimal policy responses seem to answer long-term risks and promote sustainable recovery. Economies Are Recovering, And The Outlook For Growth Is Bright
Economic recovery in the post-pandemic age is pushing for historically high global growth. After decreasing 3.7% in 2020, the economy is expected to grow 5.8% in 2021. However, this growth will be unequal. The emerging markets are expected to have a gross domestic product (GDP) growth of 6.6%, higher than the 4.8% average of 2010-2019.
China is leading with an 8.3% growth after returning to regular economic activity last year. However, countries with a slow open – with non-extensive vaccinations and fiscal stimuli – like Emerging Europe & Central Asia (4.1%), Latin America & the Caribbean (5.6%), and the Middle East & Africa (3.7%)
The insurance market had a milder impact on premiums in the Covid crisis than during the 2008-09 global financial crisis. The international direct premiums in 2021 are expected to be 10% over the 2019 levels. It is a faster rebound at this point than in the GFC recovery when dividends had barely exceeded their pre-crisis level.
the global insurance market will grow increasingly – 3.3% in 2021 and 3.9% in 2022 – quicker than previous recessions. The swift economic recovery worldwide, the most robust rise in price in non-life insurance commercial lines in 20 years, and increased risk awareness will encourage a growing demand for risk protection insurance. The life savings business should benefit from more robust financial markets and a steady recovery in consumer incomes.
The strongest rate hardening for two decades in commercial lines remains the principal driver of non-life insurance premium growth. The most significant gains were seen in the professional liability and financial lines – +39% on average in 2020 – +19% in Australia, the UK, Latin America, and the US. Property, while casualty (+6%) lagged. The price hardening will continue this year, and price rises should be reasonable.
The top 20 Global premium volume rankings showed that the US, China, and Japan led the global insurance market, accounting for almost 58% of the worldwide market, a 2% increase since 2019. The market shares of the top 20 nations also saw a 0.2% increase from 2019 – 90.7% from 90.5%.China is yet again in the lead, with 10.5% in the global insurance market in 2020. The Asian region is rapidly growing to be increasingly dominant, with six out of the top twenty countries and a 25% market share in 2020.
Insure Comp expects the emerging markets to continue to outpace developed markets. Asia will also be in the lead compared to other regions, as shown in the source of global premium growth. The global premium growth is shifting with the economic power from west to east.
Copyright © 2021 Insurecomp
CONTACT US
We are social