FRANKFURT AM MAIN: Growth in Asian emerging economies will boost global insurance markets into next year, balancing an expected slowdown in China, German reinsurance giant Munich Re said on Thursday (Apr 20).
Worldwide insurance premiums will grow by around 4.5 per cent in nominal terms - unadjusted for inflation - this year and next, up from 3.0 per cent in 2016, the group predicts in a study.
In real, inflation-adjusted terms, that would see insurers' revenue grow 2.9 per cent this year and 3.1 per cent in 2018, roughly keeping pace with global economic growth.
Munich Re expects premiums to reach some €4.56 trillion (US$4.9 trillion) in absolute terms in 2018, up from €4.18 trillion last year.
"The economies of many emerging markets, such as Brazil, but even Russia, are experiencing a significant recovery," the group's chief economist Michael Menhart said in a statement.
"This is leading to increased growth in property-casualty insurance." "Solid" economies in Europe, Japan and the US were also supporting demand, he added.
Menhart expects the growth to balance out negative factors, such as slowing economic expansion in China.
Looking further ahead, emerging Asian economies will boost their share of global insurance premiums to 21.4 per cent by 2025 from today's 13.3 per cent, Munich Re predicts - not far short of western Europe's anticipated 24.5 per cent market share.
Emerging economies in Asia and Latin America are driving growth in demand for life insurance, a sector facing headwinds from low interest rates in advanced economies.
Life insurance premiums are expected to expand by 3.0 per cent in real terms by 2018, slightly faster than global growth.
Meanwhile, property and casualty insurance will grow by 2.5 per cent, with strong support from Asia, Africa and the Middle East.