Global: Insurance industry to return to growth in 2023-2024
Source: Middle East Insurance Review | Dec 2022
The insurance industry is forecast to return to growth in 2023-2024 after total global premiums are estimated to have contracted by 0.2% in real terms in 2022, according to Swiss Re Institute’s latest sigma report. The study expected real non-life premiums to grow by 1.8% in 2023 and 2.8% in 2024; life premiums to grow by 1.7% across 2023 and 2024.
The effect of inflation on the global economy has led to total global insurance premiums falling slightly by an estimated 0.2% in real terms in 2022. The institute expects the insurance industry to return to premium growth of 2.1% annually on average in real terms in 2023 and 2024, supported by a combination of easing inflation, market hardening in property and casualty lines, as well as stronger life insurance demand. A silver lining for the insurance industry comes from central bank interest rate increases that are expected to improve investment results over the medium term.
Swiss Re group chief economist Jérôme Haegeli said, “In our view, the global economy will cool down noticeably under the weight of inflation and interest rate shocks. The repricing of risk in the real economy and financial markets is actually healthy and a long-term positive. Higher risk-free rates should mean higher returns for investing into the real economy. During today’s challenging times – and for the economic recovery period ahead – the insurance industry can show its value as it provides financial resilience at all levels of the community.” M