Insurance outlook

Positive but slowing economic momentum over the next two years will support modest global annual insurance premium growth of around 3% in real terms, a 1-percentage-point increase from 2018. In both non-life and life, the emerging markets remain the main driver, in particular China.

Key takeaways: non-life

  • Global non-life premiums will grow by around 3% on an inflation-adjusted basis in 2018, and we forecast similar growth over the coming two years.
  • The global aggregate is being driven by the emerging markets, where we forecast close to 8% premium growth this year, and around the same over 2019 and 2020.
  • Advanced market premiums have grown by about 2% this year on the back of strong economic momentum.

Global non-life insurance premium growth in real terms, actual and forecasts (2018 values showing in brackets)

We expect a positive underwriting result for the global non-life sector of around 1% of premiums this year. This will be mostly driven by a lower loss burden from natural catastrophes compared to 2017. In 2019, in the absence of clear direction on rates, we expect underwriting results to remain stable at current levels. The recent improvement of property rates has been mainly felt in regions that suffered a high natural catastrophe burden last year, and is expected to fade.

Key takeaways: life

  • We estimate that global life insurance premiums will grow by 1.6% in real terms this year, slightly slower than the average annual growth rate of the last five years.
  • The reason is China. Part-year data indicates that there will be a substantial contraction in life premiums in China this year.
  • We forecast emerging market premium growth will accelerate to around 9% annually over 2019/20. There will be a rebound in China, where the economic backdrop remains strong and as the one-off shock effect of this year's tighter regulation of wealth-management-product types fades.
  • Advanced market life premiums are expected to remain stable at current levels.

Global life insurance premium growth in real terms, actual and forecasts (2018 values showing in brackets)

There has been some recovery in life sector profitability in 2018. However, the long-running low interest rates remain a major concern for life insurers and overall sector return-on-equity remains low.

Return on equity of a sample of life insurers, by region

Read more in the full report.