Swiss Re reports on the state of the insurance industry
Swiss Re, a leading global reinsurance firm, has released a new report concerning the state of the insurance industry and the cost of coverage. The global insurance industry has been seeing a great deal of activity recently, some of which has been considered somewhat negative. The negative issues that the industry has had to deal with are largely associated with powerful natural disasters that have occurred in some parts of the world in recent months. The report shows that natural disasters are not the only things creating turmoil within the industry, however, and flagging life insurance demand, as well as turbulent growth in emerging markets, is also having a major impact on the industry as a whole.
Report highlights problems in life insurance sector
According to the report from Swiss Re, slow economic growth and massive unemployment rates in Europe have put a damper on the demand for life insurance throughout several markets. Furthermore, low investment rates have weighed heavily on investments coming from within the insurance industry. Many insurers have seen the challenges that exist in some sectors and have been working to make more cautious investments due to fears regarding returns. Beyond the life insurance sector, the insurance industry seems to be doing quite well in certain markets, such as China.
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Higher premiums are on the horizon
The report suggests that the insurance industry is likely to see some of its current troubles dissipate with the coming of higher premiums in emerging markets. As rates grow in these markets, insurers will have a better time managing surplus capacity issues that have been brought to light due to economic turmoil and the onslaught of natural disasters. Swiss Re anticipates that rates will grow at a moderate pace in the short term, with global premiums likely to rise by an average of 2.4%.
Regulations in prominent markets create strife for some
The markets in China and India are expected to see the most change when it comes to the insurance industry in the coming years. These countries have been introducing new regulations that are meant to mitigate the economic risks they face in their association with the insurance industry. For some sectors, these new regulations have been problematic for business, while other sectors are thriving because of the attention they are receiving from both consumers and government officials.