World insurance outlook: strong demand to offset inflation risk impacts
Article information and share options
We expect inflation to remain higher over the coming years than of late. Even so, the overall outlook for the insurance sector remains positive.
The key takeaways from this Economic insights are:
- Strong economic recovery, rising risk awareness and digitalisation will continue to drive insurance demand.
- Hard rates will also contribute to premium volume growth. We forecast that global premiums will exceed the USD 7 trillion mark for the first time by the end of 2022.
- We expect medium-term inflation to remain above pre-pandemic levels.
- Policymakers will be more accepting of higher levels of inflation whilst the risk to the growth outlook remains skewed to the downside.
- Higher inflation could impact insurer earnings. For example, increases in medical costs and wages could push up claims in workers' compensation and other lines of liability business.