Global premium volume is expected to hit EUR7.9trn by 2030, according to Munich Re’s latest Insurance Market Outlook.
This represents almost double the EUR4.2trn of premiums recorded in 2017.
Munich Re anticipates that some EUR1.2trn of this growth will come from China alone, with almost two thirds of this likely to derive from life and health insurance business, with the rest coming from property and casualty (P&C) insurance.
Nonetheless, the reinsurer said that the US will likely remain the world’s largest insurance market with a market share of around 24 percent, with China expected to move into second place, overtaking Japan.
While InsurTech innovations are also expected to lead to a surge in premium growth in emerging markets and developing countries, they are unlikely to significantly impact premium growth in industrialised countries, although InsurTechs will likely change these markets considerably through their role as digital brokers, as well as through product innovations and the use of new technologies along the value chain.
Looking at the nearer term, the report predicted that rate of growth of the global (re)insurance industry is set to overtake the global economy in 2018 and 2019, with average annual premium growth forecast at 5.3 percent, compared with global GDP growth of 4.9 percent
Munich Re reported that life insurance is set to recover after a weak 2017, with projected annual premium growth of 5.6 percent, while P&C will continue to benefit from a favourable economic environment, with projected annual premium growth of 5 percent.
Emerging countries are expected to act as the primary drivers of growth, although stronger rates in high-volume industrialised countries are also contributing to the positive development.
Growth rates for P&C insurance in emerging markets are forecast on average at 9.5 percent for 2018/2019, with particularly strong growth expected in China, the Middle East, North Africa, and some areas of Latin America.
Life insurance is generally subject to greater fluctuations than P&C but is still forecast average growth rates of 5.6 percent due to an expected recovery in the US market, which currently accounts for around 20 percent of the global market share, and projected growth rates of almost 20 percent for China.
Developed markets will generally see moderate life insurance growth as a result of sustained low interest rates, whereas most emerging markets will experience higher growth, particularly in Eastern Europe and Latin America.