Commercial insurance market facing new challenges as economies evolve
Swiss Re, one of the world’s leading reinsurance groups, has released a new report concerning the state of the commercial insurance market and the challenges it is beginning to face. The report highlights the changes an evolving global economy are having on the commercial insurance market, suggesting that this evolution is producing new risks that could harm the market if proper precautions are not taken. Despite these risks, however, the commercial insurance market is showing aggressive growth, especially in under-developed countries.
Report highlights the growth of commercial insurance markets in developing countries
The report, titled “Insuring Ever-Evolving Commercial Risks,” found that the commercial insurance market is growing faster in emerging economies than it is in developed countries around the world. China is cited as a powerful example. The country’s expanding economy is making insurance coverage more available to consumers that have never had the means to afford this coverage in the past. As such, the demand for insurance of various kinds is booming in China. This is also true for other countries that are seeing strong economic growth.
Natural disasters pose serious risk
Despite growth, the frequency and severity of natural disasters, as well as flaring political tensions between powerful countries, is driving up the need for comprehensive action to be taken by the insurance industry. The commercial insurance market is expected to be confronted with several difficult challenges if penetration is not increased. The report from Swiss Re notes that property risks are increasing as environmental changes begin to take root and the potential for business interruption represents a serious financial risk to both countries and the global insurance industry.
Changing US economy causes changes in commercial insurance market
Swiss Re has found that the commercial insurance market in the U.S. is undergoing significant changes as the needs of businesses begin to evolve. Demand for liability insurance is rising amongst businesses, especially as the U.S. begins shifting toward a knowledge-based economy. Industries exposed to liability risks are expected to seek out appropriate coverage in droves at the U.S. economic structure continues to change and present new problems.