Global life insurance premiums are projected to grow by 3% this year, led by a rebound in emerging Asian markets, a Swiss Re study is forecasting, but it notes that “regulatory changes and low investment yields” will result in an increasing focus on risk protection products, such as term life insurance, rather than on savings products.
Also driving consumers in the direction of risk protection products in many of the key emerging Asian markets will be these markets’ “huge health protection gaps”, the Swiss Re study, Global re/insurance review 2012 and outlook 2013/14, predicts.
Global non-life premiums are expected to grow by 4%, while similar premiums in emerging Asian markets will sustain double-digit growth in 2013, the Swiss Re study says.
More favourable backdrop
In unveiling their research, the authors of the Swiss Re study set it against the state of the global economy, which, they note, is fairly weak, although they believe an improving housing market in the US, fiscal and monetary stimulus in China, and a slow turnaround in the Euro area will boost growth in 2013.
“Monetary policies will remain accommodative in major economies well into 2015, but low interest rates will reduce insurers' investment returns,” a summary of the report’s findings notes.
“Inflation will stay tame in advanced markets, but the risk of inflationary pressures re-escalating in emerging markets warrants close monitoring.”
Meanwhile, while sales are expected to rise or rebound in most markets, overall profitability, is “not expected to rebound quickly”, the Swiss Re study points out, according to the summary of its findings, though underwriting profitability is seen as “likely to improve slightly in most markets and segments in 2013 and 2014".
“Investment returns this year will remain low and profitability will rise slowly as prices and interest rates increase.”
To read a summary of the Swiss Re study on the company's website, click here.
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