Advanced EMEA

After a solid 2019, premiums will decline



  • Premium growth was solid across most countries in advanced EMEA in 2019. However, there were strong declines in Spain and Portugal, and the Austrian market contracted for a fifth year in a row, though at a reduced pace (–3.7%). Premium growth in the UK slowed moderately after a 15% surge in 2018.
  • European life insurers continued to shift their new business from capital-intense to capital-light (eg, unit-linked) savings products. In markets such as Germany, however, where guarantees are usual in life and re-pricing is not possible, technical liabilities were still dominated by traditional savings products. Life insurers in EMEA also continued to promote more sales of protection business.
  • It is too early to say with confidence how COVID-19 will affect life claims, but we believe the mortality rate of in-force books will be less affected than the general population. First, deaths (eg, in Italy and Spain) have been concentrated among the older generation who are less likely to own life insurance. Second, deaths are higher among people of all ages with chronic medical conditions. Life policyholders are typically healthier than the general population.
  • With a steep recession in Europe and because savings business is by far the largest source of sector premium income, we expect life premiums in advanced EMEA to decline by close to 10% in 2020. Historically low interest rates will continue to dent the attractiveness of life insurance as a savings vehicle.


  • There was strong market growth in France and the Nordics in 2019, and weaker growth in Germany and the Netherlands. Premium volumes in the UK declined.
  • Premiums in Luxembourg’s non-life insurance market almost tripled after about a dozen companies including AIG and Liberty Mutual moved their European business out of the UK ahead of Brexit. Almost all of the remaining countries showed solid growth.
  • Premium growth was supported by moderate improvements in pricing, both in commercial lines and in motor and household insurance.
  • In France, premiums expanded by 3.5% last year (+2.9% in 2018), mainly driven by the commercial lines segment (general liability, other liability, motor fleet business), and accident and health insurance. Houseowners and personal motor business also contributed to the expansion. Claims development was moderate overall, with higher commercial property claims in part offset by a declining loss burden from natural catastrophes.
  • The German non-life insurance market grew moderately again, with premiums up 1.5% in real terms in 2019 (+1.6% in 2018). The main driver was property insurance, with a 4% increase due to upward adjustments to sums insured and additional demand for elementary perils covers.
  • The outlook for 2020 and 2021 is overshadowed by what will be a sharp COVID-19 induced recession. We expect premium volumes to decline by close to 2% this year, mainly due to the sharp drop in economic activity during the government-enforced lockdown, which will depress new business and premiums volumes in commercial lines.
  • Insurance claims related to COVID-19 will be limited to some highly affected lines of business such as credit and surety, event cancellation and travel insurance, and also to business interruption policies that cover pandemics. The Association of British Insurers (ABI) has published an initial estimate that its members will pay out GBP 1.2 billion in COVID-19 associated claims in the UK, of which three quarters will be related to business interruption losses.1

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1 Covid-19: Payouts of over GBP 1.2 billion likely to be made to customers according to latest estimate from the ABI, Association of British Insurers, 25 April 2020.


World Insurance: Regional review 2019, and outlook Advanced EMEA sigma extra 4/2020

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