World insurance in 1999
No. 9/2000
World insurance in 1999: Soaring life insurance business
In 1999 global premium income in the insurance industry, adjusted for inflation, recorded strong growth of 4.5%. Booming life insurance business and a moderate increase in non-life insurance were the drivers of this growth. Life insurance benefited as a result of the shift from public to private pension provision whereas non-life insurance was adversely affected by low prices. With analyses of developments in individual regions and detailed information on premium income for life and non-life in the 84 most important countries, Swiss Re's most recent sigma provides a comprehensive overview of insurance worldwide.
60% of all premiums from life insurance
Worldwide premium volume in 1999 amounted to USD 2'324 billion, with life insurance accounting for 61% and non-life for 39%. Over nine tenths of premiums derived from the industrialised countries, where on average 8.7% of GDP or USD 2'297 per capita was spent on insurance. Japan and Switzerland spent the most per capita on life and non-life insurance respectively. In the emerging markets an average of just 2.7% of GDP or USD 40 per capita was spent on insurance.
Boom in life insurance - apart from Asia
Life insurance companies benefited in 1999 from low interest rates and the increasing significance of private pension provision. At 6.9%, growth was two percentage points higher than the average over the previous ten years and considerably higher than global economic growth over the same period. Outside Asia there has been a veritable boom in life insurance: in North America and Western Europe, premium volumes grew by 9.2% and 16% respectively, in Central and Eastern Europe by 32.5% and in the remaining regions by 8-10%. Only the decrease in Japan (-5.4%) and South Korea (-11%) set back worldwide growth: in Japan business was affected by economic stagnation, insolvencies and the lowering of the guaranteed interest rate and in South Korea by the after effects of the financial crisis.
Waiting for the turnaround in non-life insurance
Non-life growth of +1.2% in 1999 was below the long-term average, although it did improve slightly over the previous year. Since 1994 non-life premium growth has been lower than overall GDP. Price erosion continued to affect the market - in personal lines this was caused by deregulation in Western Europe and Japan and in international commercial business by overcapacity. The slump in Western Europe seems to have bottomed out in 1999: at 1.7% growth was almost the same as overall economic growth. However, growth rates of individual countries differed markedly: whereas the three biggest markets (UK, Germany and France) stagnated, the smaller markets posted healthy growth. Growth in the US (+1.3%) remained significantly below economic growth. Japan registered a decline in premiums for the third consecutive year (-3.0%). Southeast Asian countries, which had to contend with sharp falls in premiums last year as a result of the Asian crisis, recovered to a certain extent. The 3.3% increase in premiums in Asia's emerging markets was markedly below the long-term average as it was in Latin America and Africa. The price increases necessitated by unsatisfactory underwriting results worldwide should bring about a turnaround in non-life business.
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Download "Assekuranz Global 1999: Höhenflug in der Lebensversicherung"
Download "El seguro global en 1999: gran auge de los seguros de vida"
Download "L'assurance dans le monde en 1999: envolée de l'assurance vie"
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