Munich Re predicts that the strength of the sector will continue on over the next 7 years.
According to the Insurance Market Outlook 2013, which was just released by Munich Re, the global insurance industry will continue with strong growth over several years to come, especially in emerging nations.
The report showed that there will be slower growth in reinsurance than in the primary coverage sector.
The chief economist at Munich Re, Michael Menhart, said about the insurance industry’s future, that “The global economic recovery is also benefiting the insurance industry. We expect the economies of key industrialized countries to improve in the second half of 2013 and in 2014. Consequently, this will lend impetus to demand for insurance.
The report looked into several areas of the insurance industry and the growth that they will experience.
Munich Re’s estimates showed that at least until 2020, the entire property and casualty market will experience a growth of approximately 50 percent when compared to that portion of the insurance industry in 2012. This will bring that market to an estimated €1.85 trillion. Moreover, it will be in the emerging countries where growth in both reinsurance and insurance will be greater than in industrialized nations.
The predictions showed that the mature insurance industry markets in Western Europe and North America, as well as in the Asia/Pacific region’s industrialized counties will hold the dominant position in terms of the strength of growth. However, by 2020, their share will drop back to approximately 73 percent. That will be about 10 percent lower than where it was in 2012 for total primary coverage premiums. The emerging countries in Asia will generate a share that will increase from 8 percent in 2012, to 16 percent in 2020.
Menhart explained that about “half of all the additional premium earned between 2013 and 2020 will come from the USA, China and Japan. In this respect, saturated markets and emerging markets both represent great potential for growth in insurance and reinsurance alike.” The insurance industry premium growth forecast for 2013 is just shy of 3 percent, and will be just over 3.5 percent next year.