The market is creating many conditions for the insurance industry to grow, but the issue of inflation may slow the market down.
According to the new forecast of Swiss Re Institute, around the middle of 2022, global insurance premiums will reach a new record, surpassing 7 trillion USD. This record reflects the growing need for protection and awareness of health risks.
The strong recovery due to the Covid-19 pandemic also supports the growth outlook of the insurance industry. However, growth is expected to slow over the next two years due to the energy price crisis, lingering supply problems and inflation risks, according to the report. Swiss Re Institute.
Climate change and digitalization will be the factors that directly affect future insurance trends. The insurance industry can support a green economic transition by recovering from disaster damage and promoting sustainable infrastructure investment. Another important trend is that the socio-economic indicators of countries are increasingly divided, leading to the risk that insurance prices will decrease.
“The economic recovery we are experiencing is cyclical and not structural, weaker than before the Covid-19 crisis. We should therefore not be complacent.” Jerome Haegeli, said the chief economist of the Swiss Re group.
Also according to him JeromeThe insurance industry plays an important role in making society and the economy more resilient. However, for even and sustainable growth, everyone must internalize the costs from climate change, the distributive impact of economic policies on people… Green growth is only sustainable if it is inclusive.
The study predicts global GDP growth in 2021 at 5.6%, slowing to 4.1% in 2022 and 3% in 2023. Inflation is the main risk during this period, pressure on Prices are expected to appear most in emerging markets, the UK and the US.
While, Swiss Re Institute Global non-life insurance premiums are predicted to increase by 3.3% in 2021, to 3.7% in 2022 and back to 3.3% in 2023. Global health premiums are expected. will increase due to the growth of the US economy and stable market demand. Emerging insurance markets are projected to expand strongly, with China projected to grow by 10% over the next two years. In addition, global life insurance premiums are expected to increase by 3.5% in 2021, 2.9% in 2022 and 2.7% in 2023.
The shock of the pandemic has highlighted the role of insurance as a means of mitigating financial risks for individuals, businesses and governments. However, supply chain disruptions show that people still need better protection.
“The market is creating conditions for premiums to rise. However, inflation across all businesses continues in the US and persistently low interest rates will slow the market,” he said. Haegeli speak.
Thanh Thu (follow Insurance Business Australia)