Global insurance market to hit a record of US$7 trillion by mid-2022
The global insurance market is expected to exceed US$7 trillion in premium terms for the first time by mid-2022 thanks to rising risk awareness among consumers and businesses, a recent study noted.
Global real insurance premiums are estimated to grow by 3.4 percent in 2021, and the growth trend will continue for the next two years, according to Swiss Re's latest sigma research.
Growth can be contributed to rising risk awareness in both life and non-life insurance among consumers and businesses following the shock of COVID-19.
The crisis has once again demonstrated the utility of the insurance industry as a vital risk absorber. People's awareness of climate risk has been heightened by extreme weather events, the study said.
Insurance profitability should improve next year after a challenging 2021 as the industry processes COVID-19-related claims, above-average catastrophic losses, and high inflation.
Non-life underwriting profitability should recover from 2022 as insurers internalize the expectations of higher inflation and rates in commercial lines rise again.
For life insurers, advances in COVID-19 vaccination should also strengthen profitability next year after a year of high mortality in 2021.
Investment returns, however, will likely be challenged by ongoing low interest rates that do not fully compensate for inflation, making underwriting discipline crucial, Swiss Re added.