Global: Insurance industry to cross $7tn by mid-2022
Source: Middle East Insurance Review | Dec 2021
The global market is expected to exceed $7tn in premium terms for the first time by mid-2022, projected Swiss Re Institute’s sigma study noting that this growth will be taking place sooner than it has estimated in July.
Global insurance premiums are forecasted to grow by 3.4% in real terms in 2021, 3.3% in 2022 and 3.1% in 2023, as per the study, titled ‘Turbulence after lift-off: Global economic and insurance market outlook 2022/23’. Growth will be driven by rising risk awareness in both life and non-life insurance, among consumers and businesses, following the shock of COVID-19 while the ongoing rate hardening in non-life insurance commercial lines will provide further support.
However, slower economic growth is projected in the coming two years. While real economic growth is expected to reach 5.6% this year, growth will slow to 4.1% in 2022 and 3% in 2023 as global supply chain issues, labour shortages and high energy prices persist. The study highlighted inflation as number one near-term macro risk, which stems from these same factors.
The growing divergence within and between countries in economic recovery, wealth, income and socioeconomic opportunity is a cause for concern and make the recovery fragile while digitalisation is likely to be key to higher productivity growth. Additionally, the study noted that rapid progress on decarbonisation is imperative as extreme weather events worldwide this year indicate that climate risks are materialising.
“The economic recovery we are experiencing is cyclical and not structural, with macroeconomic resilience weaker today than before the COVID-19 crisis. As such, we should be anything but complacent,” said Swiss Re Group chief economist Jerome Haegeli. M