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16.07.2024 10:00:57 - Robust economies set to drive insurance growth -2-
DJ Robust economies set to drive insurance growth and profitability, says Swiss Re Institute
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Swiss Re Ltd / Key word(s): Research Update
Robust economies set to drive insurance growth and profitability, says Swiss Re Institute
2024-07-16 / 10:00 CET/CEST
. Major economies are more resilient than expected, with global GDP growth forecast at 2.7% in real terms
in 2024
. Non-life hard market expected to continue over 2024 and 2025 as inflation and rising claims costs push
rates higher
. Higher interest rates to boost both growth and profitability for life insurance business in 2024
Zurich, 16 July 2024 - Geopolitical tensions and higher inflation have led to economic concern in recent years. Swiss
Re Institute's annual World Insurance sigma report finds that the global economy has remained remarkably resilient,
setting the scene for growth and improved profitability across the insurance industry.
Jérôme Haegeli, Swiss Re's Group Chief Economist says: "The insurance industry has reached a new equilibrium after the
challenges of recent years. The global economy has surprised on the upside, which should drive more demand for
insurance. The life sector in particular is one to watch as higher interest rates drive investment income and consumer
demand for annuities, giving more people secure retirement incomes."
Continuing global growth for 2024 and 2025
Swiss Re Institute estimates that global gross domestic product (GDP) will grow by 2.7% in real terms in 2024, the same
as 2023. This resilient growth is expected to continue into 2025 at 2.8% in real terms. While the overall outlook is
positive, regions are on different trajectories, with the US forecast to grow at 2.5% in 2024, while the euro area is
expected to show below-trend growth of 0.7%.
The trend to global disinflation continues. However, returning to target inflation levels is unlikely to be a smooth
journey. In the US, inflation is expected to return to target in 2025, due to higher-than-anticipated core services
prices. Europe is already near its target inflation levels, driven by a fall in energy prices in 2023, softer core
prices and an expected deceleration in wage growth.
Profitability for non-life insurance expected to improve
Due to inflation and the resulting rise in claims costs, non-life insurers have increased rates over recent years.
Swiss Re Institute sees higher prices continuing for personal lines in 2024, moderating into 2025. For commercial
lines, though still positive, rate increases have decelerated with some markets starting to soften. Overall, non-life
premium volume is forecast to build on the 3.9% growth achieved in 2023, reaching USD 4.6 trillion in 2024 and USD 4.8
trillion in 2025.
Kera McDonald, Chief Underwriting Officer Swiss Re Corporate Solutions says: "Commercial insurance accounts for almost
half of the total property and casualty market. We expect commercial P&C carriers to maintain profitability in 2024, as
rate trends have enabled lines like property to stay sustainably priced. The industry has seen single-digit rate
increases for property business written this year. On the casualty side, we observe a trend of general market softening
across most long tail lines."
Property and casualty insurers are expected to improve profitability in 2024, with industry-wide return on equity (ROE)
across eight major markets at 10% so far this year, up from 6% in 2023. ROE of above 10% is forecast into 2025.
Life insurance boom on the back of higher interest rates
The life insurance industry is facing a double benefit from the higher interest rate environment, with both top-line
growth and improved profitability. Swiss Re Institute forecasts 2.9% premium growth for the industry by the end of
2024, reaching a total premium pool of USD 3.0 trillion. Similar growth of 2.7% is expected in 2025. Strong rebounds in
growth should be visible in many key markets, with Western Europe and advanced APAC returning to premium growth.
A significant growth area for life insurance is the uptake of annuities to boost retirement savings. In the US, for
example, sales of fixed-rate annuities jumped 63% in 2022 and 36% in 2023. Longer term, advanced markets are expected
to contribute half of all additional premiums over the next 10 years, driven by strong growth in annuities.
For 2024, Swiss Re Institute forecasts that the combination of increased premium and increased investment income will
boost profitability in the life sector, with the operating results across eight top markets increasing 15% for the
year.
Ranking of insurance markets by total premium pool.
===
"e"=estimated, "f"= forecast *Data for 2023 is provisional for Canada, Switzerland, Hong Kong. Data for 2023 is estimated for US, UK, Japan, France, Germany, South Korea, Italy, India, Netherlands, Brazil, Spain, Australia, Denmark and Sweden.
World Insurance sigma Media Dialogue
Journalists are welcome to join the World Insurance sigma media event via MS Teams at 11:00am CEST today. Jérôme Haegeli, Swiss Re's Group Chief Economist, will provide insights into the macroeconomic factors driving growth in life and non-life insurance. Kera McDonald, Swiss Re Corporate Solutions' Chief Underwriting Officer, will explore the commercial insurance sector. There will also be a Q&A session.
Further information is available here.
How to download this study
Swiss Re Institute's publication " World Insurance sigma 2024" is available here.
Disclaimer
Although all the information discussed herein was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the information given or forward-looking statements made. The information provided and forward-looking statements made are for informational purposes only and in no way constitute or should be taken to reflect Swiss Re's position, in particular in relation to any ongoing or future dispute. In no event shall Swiss Re be liable for any financial or consequential loss or damage arising in connection with the use of this information and readers are cautioned not to place undue reliance on forward-looking statements. Swiss Re undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.
For further information please contact Swiss Re Media Relations: + 41 (0)43 285 7171 or Media_Relations@Swissre.com. Please use this link to access Swiss Re's press releases. Swiss Re The Swiss Re Group is one of the world's leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, working to make the world more resilient. It anticipates and manages risk - from natural catastrophes to climate change, from ageing populations to cyber crime. The aim of the Swiss Re Group is to enable society to thrive and progress, creating new opportunities and solutions for its clients. Headquartered in Zurich, Switzerland, where it was founded in 1863, the Swiss Re Group operates through a network of around 80 offices globally.
Cautionary note on forward-looking statements Certain statements and illustrations contained herein are forward-looking. These statements (including as to plans, objectives, targets, and trends) and illustrations provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact. Further information on forward looking statements can be found in the Legal Notice section of Swiss Re's website.
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End of Media Release
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Mythenquai 50/60
8022 Zurich
Switzerland
End of News EQS News Service
===
1947219 2024-07-16 CET/CEST
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===
Swiss Re Ltd / Key word(s): Research Update
Robust economies set to drive insurance growth and profitability, says Swiss Re Institute
2024-07-16 / 10:00 CET/CEST
. Major economies are more resilient than expected, with global GDP growth forecast at 2.7% in real terms
in 2024
. Non-life hard market expected to continue over 2024 and 2025 as inflation and rising claims costs push
rates higher
. Higher interest rates to boost both growth and profitability for life insurance business in 2024
Zurich, 16 July 2024 - Geopolitical tensions and higher inflation have led to economic concern in recent years. Swiss
Re Institute's annual World Insurance sigma report finds that the global economy has remained remarkably resilient,
setting the scene for growth and improved profitability across the insurance industry.
Jérôme Haegeli, Swiss Re's Group Chief Economist says: "The insurance industry has reached a new equilibrium after the
challenges of recent years. The global economy has surprised on the upside, which should drive more demand for
insurance. The life sector in particular is one to watch as higher interest rates drive investment income and consumer
demand for annuities, giving more people secure retirement incomes."
Continuing global growth for 2024 and 2025
Swiss Re Institute estimates that global gross domestic product (GDP) will grow by 2.7% in real terms in 2024, the same
as 2023. This resilient growth is expected to continue into 2025 at 2.8% in real terms. While the overall outlook is
positive, regions are on different trajectories, with the US forecast to grow at 2.5% in 2024, while the euro area is
expected to show below-trend growth of 0.7%.
The trend to global disinflation continues. However, returning to target inflation levels is unlikely to be a smooth
journey. In the US, inflation is expected to return to target in 2025, due to higher-than-anticipated core services
prices. Europe is already near its target inflation levels, driven by a fall in energy prices in 2023, softer core
prices and an expected deceleration in wage growth.
Profitability for non-life insurance expected to improve
Due to inflation and the resulting rise in claims costs, non-life insurers have increased rates over recent years.
Swiss Re Institute sees higher prices continuing for personal lines in 2024, moderating into 2025. For commercial
lines, though still positive, rate increases have decelerated with some markets starting to soften. Overall, non-life
premium volume is forecast to build on the 3.9% growth achieved in 2023, reaching USD 4.6 trillion in 2024 and USD 4.8
trillion in 2025.
Kera McDonald, Chief Underwriting Officer Swiss Re Corporate Solutions says: "Commercial insurance accounts for almost
half of the total property and casualty market. We expect commercial P&C carriers to maintain profitability in 2024, as
rate trends have enabled lines like property to stay sustainably priced. The industry has seen single-digit rate
increases for property business written this year. On the casualty side, we observe a trend of general market softening
across most long tail lines."
Property and casualty insurers are expected to improve profitability in 2024, with industry-wide return on equity (ROE)
across eight major markets at 10% so far this year, up from 6% in 2023. ROE of above 10% is forecast into 2025.
Life insurance boom on the back of higher interest rates
The life insurance industry is facing a double benefit from the higher interest rate environment, with both top-line
growth and improved profitability. Swiss Re Institute forecasts 2.9% premium growth for the industry by the end of
2024, reaching a total premium pool of USD 3.0 trillion. Similar growth of 2.7% is expected in 2025. Strong rebounds in
growth should be visible in many key markets, with Western Europe and advanced APAC returning to premium growth.
A significant growth area for life insurance is the uptake of annuities to boost retirement savings. In the US, for
example, sales of fixed-rate annuities jumped 63% in 2022 and 36% in 2023. Longer term, advanced markets are expected
to contribute half of all additional premiums over the next 10 years, driven by strong growth in annuities.
For 2024, Swiss Re Institute forecasts that the combination of increased premium and increased investment income will
boost profitability in the life sector, with the operating results across eight top markets increasing 15% for the
year.
Ranking of insurance markets by total premium pool.
Rank Country Total premium volume Market Share 2023* 2024e 2025f 2023e 1 United States 3,227 3,424 3,584 44.9% 2 China 724 812 893 10.1% 3 United Kingdom 375 401 420 5.2% 4 Japan 363 370 382 5.0% 5 France 283 292 303 3.9% 6 Germany 245 255 264 3.4% 7 South Korea 186 194 205 2.6% 8 Canada 171 176 185 2.4% 9 Italy 159 165 171 2.2% 10 India 136 149 162 1.9% 11 Netherlands 93 98 102 1.3% 12 Brazil 84 92 98 1.2% 13 Spain 83 88 92 1.2% 14 Taiwan 78 80 84 1.1% 15 Australia 74 76 79 1.0% 16 Hong Kong 66 70 75 0.9% 17 Switzerland 61 63 65 0.9% 18 Mexico 45 50 54 0.6% 19 Denmark 44 47 51 0.6% 20 Sweden 44 45 48 0.6%
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"e"=estimated, "f"= forecast *Data for 2023 is provisional for Canada, Switzerland, Hong Kong. Data for 2023 is estimated for US, UK, Japan, France, Germany, South Korea, Italy, India, Netherlands, Brazil, Spain, Australia, Denmark and Sweden.
World Insurance sigma Media Dialogue
Journalists are welcome to join the World Insurance sigma media event via MS Teams at 11:00am CEST today. Jérôme Haegeli, Swiss Re's Group Chief Economist, will provide insights into the macroeconomic factors driving growth in life and non-life insurance. Kera McDonald, Swiss Re Corporate Solutions' Chief Underwriting Officer, will explore the commercial insurance sector. There will also be a Q&A session.
Further information is available here.
How to download this study
Swiss Re Institute's publication " World Insurance sigma 2024" is available here.
Disclaimer
Although all the information discussed herein was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the information given or forward-looking statements made. The information provided and forward-looking statements made are for informational purposes only and in no way constitute or should be taken to reflect Swiss Re's position, in particular in relation to any ongoing or future dispute. In no event shall Swiss Re be liable for any financial or consequential loss or damage arising in connection with the use of this information and readers are cautioned not to place undue reliance on forward-looking statements. Swiss Re undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.
For further information please contact Swiss Re Media Relations: + 41 (0)43 285 7171 or Media_Relations@Swissre.com. Please use this link to access Swiss Re's press releases. Swiss Re The Swiss Re Group is one of the world's leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, working to make the world more resilient. It anticipates and manages risk - from natural catastrophes to climate change, from ageing populations to cyber crime. The aim of the Swiss Re Group is to enable society to thrive and progress, creating new opportunities and solutions for its clients. Headquartered in Zurich, Switzerland, where it was founded in 1863, the Swiss Re Group operates through a network of around 80 offices globally.
Cautionary note on forward-looking statements Certain statements and illustrations contained herein are forward-looking. These statements (including as to plans, objectives, targets, and trends) and illustrations provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact. Further information on forward looking statements can be found in the Legal Notice section of Swiss Re's website.
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End of Media Release
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Language: English Company: Swiss Re Ltd
Mythenquai 50/60
8022 Zurich
Switzerland
Phone: +41 (0) 43 285 71 71 E-mail: Media_Relations@swissre.com Internet: www.swissre.com ISIN: CH0126881561 Valor: 12688156 Listed: SIX Swiss Exchange EQS News ID: 1947219
End of News EQS News Service
===
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| Name | WKN | Börse | Kurs | Datum/Zeit | Diff. | Diff. % | Geld | Brief | Erster | Schluss | |
|---|---|---|---|---|---|---|---|---|---|---|---|
 |
SWISS RE AG NAM. SF -,10 | A1H81M | Hamburg | 0,000 | 24.08.24 15:34:58 | ±0,000 | ±0,00% | 0,000 | 0,000 | 0,000 | 88,620 |
