Global reinsurer Swiss Re indicated that the outlook for the insurance sector in emerging markets (EMs) is strong despite the cyclical and structural headwinds that are weighing on their overall economic growth prospects, such as financial volatility, trade-related uncertainties, rapidly ageing populations in some markets, high indebtedness, and stagnating productivity. It noted that, despite the economic slowdown, the current level of income per capita in EMs is favorable for the insurance industry and has supported demand for insurance products. It expected growth in insurance markets in Latin America, Central & Eastern Europe, as well as Asia excluding China, to accelerate in coming years. It anticipated that Brazil, China, Mexico, Russia and Turkey will lead the growth in EM premiums in the medium term. In this context, it expected the EM share of global insurance premiums to increase by about 50% over the next 10 years, mainly driven by premium growth in EM Asia. It anticipated China to become the largest insurance market in the world in the next 15 years.

In addition, Swiss Re forecast non-life insurance premiums in EMs to post a real growth rate of 8% annually in the 2019-20 period, supported by stronger non-life business in emerging Asia excluding China, as well as Africa, Central & Eastern Europe, and Latin America. In comparison, it projected non-life premiums in advanced economies to expand by a real rate of 2% annually in the 2019-20 period. In parallel, it expected life insurance premiums in EMs to increase by 9% in real terms in the 2019-20 period, following an expansion rate of 1% in 2018. It attributed the recovery in EM life premiums in the next two years to increases of 11% and 4% in life premiums in China and Latin America, respectively, following contractions of 2% and 1%, respectively, in 2018. In comparison, it forecast life premiums in advanced economies to increase by a real rate of 1% annually in the next two years.
Source: Swiss Re