premium developments since 1960335c0142-6224-4f41... · 1 swiss re sigma no. 3/2018 swiss re sigma...

1emsp Swiss ReemspsigmaemspNoemsp32018 Swiss ReemspsigmaemspNoemsp32018emsp 2

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Premium developments since 1960 andemspaemsplookemspaheademsptoemsptheemspnextemspfiftyemspyearsemspofemspsigmaemspregionalemspgrowthemsppatternsemspandemspinsuranceemsppenetration

Foremsp50emspyearsemspsigmaemsphasemspbeenemsppublishingemspdataemsponemsppremiumsemspwrittenemspinemsptheemspglobalemspinsuranceemspmarketsemspTheseemspdataemspprovideemspanemspunmatchedemspoverviewemspofemsptheemspchangingemspgrowthemsppatternsemspandemspdevelopmentsemspofemspinsuranceemsppenetrationemspoveremsptheemsppastemspsixemspdecadesemspandemspareemsphelpfulemspinemsppredictingemsptheemspfutureemsp

A first shift to AsiaemspUpemspuntilemsptheemsplateemsp1970semspNorthemspAmericaemspandemspWesternemspEuropeemspwereemsptheemspmainemspcontri-butorsemsptoemspglobalemsprealemsppremiumemspgrowthemspAfteremspWorldemspWaremspIIemsptheemspmassemspproductionemspofemspautomobilesemspinemsptheemsp1950semspboostedemsptheemspmotoremspinsuranceemspbusinessemspemspemspemspemspemspConsequentlyemspnon-lifeemspinsuranceemsppenetrationemsp(premiumsGDP)emspwasemsponemspanemspupwardsemsppathemsp(seeemspleftemspfigures)emspieemspinsuranceemspmarketsemspexpandedemspmoreemspstronglyemspthanemspGDPemsp(seeemspFigureemsp6emspsigmaemspNoemsp32018)emspLifeemspinsuranceemspinemsptheseemsptwoemspregionsemsphoweveremspgrewemspatemspaboutemsptheemspsameemsprateemspasemspGDPemspieemsppenetrationemsplevelsemspremainedemspstableemspuntilemsptheemsplateemsp1970semsp

TheemspinsuranceemspindustryemspalsoemspexpandedemsprapidlyemspinemsptheemspadvancedemspAsianemspmarketsemspdomi-natedemspbyemspJapanemspWithemsptheemspeconomyemspgrowingemspatemsp8emsponemspaverageemspinemsptheemsp1960semspandemsp1970semspandemspGDPemspperemspcapitaemspconvergingemsptowardsemspUSemsplevelsemsplifeemspinsuranceemspgrowthemspoutpacedemspeconomicemspgrowthemspLifeemspinsuranceemspinemspJapanemspwasemsppopularemspdueemsptoemsptheemspsoaringemsplevelsemspofemsphouseholdemspsavingemspandemsptheemspcountrylsquosemspdevelopingemspsocialemspsecurityemspsystememspforemspoldemspageemspprovisionemspsigmaemspNoemsp111981emspnotesemspthatemspinemsptheemsp1960semspandemsp1970semspinsuranceemspgrowthemspcyclesemspfollowedemsptheemspeconomicemspcyclesemspquiteemspcloselyemspInemsptheemsplifeemspsectoremspthisemsplinkemsphasemspsinceemspweakenedemspLifeemspinsuranceemspmarketsemspinemspNorthemspAmericaemspandemspWesternemspEuropeemspsurgedemspinemsptheemsp1980semspuntilemsptheemspturnemspofemsptheemspcenturyemspLifeemspsavingsemspbusinessemspgrowthemspwasemspsupportedemspbyemsptaxemspincentivesemspattractiveemspinterestemsprateemspguaranteesemspandemspinnovationsemspemspsuchemspasemspunit-linkedemspproductsemspwhichemsptiedemsptheemspreturnemsptoemsptheemspperformanceemspofemspaemspparticularemspinvestmentemsp

Fast growth in the 1980semspNon-lifeemsppremiumemspgrowthemspgainedemspstrongemspmomentumemspinemsptheemsp1980semspafteremspaemspweakemspstartemsptoemsptheemspdecadeemspandemspanemspoilemsppriceemspshockemspAccordingemsptoemspsigmaemspNoemsp51995emspgrowthemspwasemspdrivenemspbyemspbdquoextraordinarilyemsphighemspclaimsemsppaymentsemspthatemspwereemspincurredemspinemsptheemspUSemspbecauseemspofemspchangingemsplegalemspprecedentsemspinemspquestionsemspofemspliabilityldquoemspThisemspstrainedemsptheemspcapitalemspbaseemspofemsptheemspinsuranceemspindustryemspandemspgaveemspriseemsptoemspmassiveemsppremiumemsprateemspincreasesemspbutemsptheemsprevivingemspeconomyemspalsoemsphademspaemsppositiveemspeffectemspAsemspaemspresultemsppremiumsemspwereemsprisingemspatemspaemsprateemspthatemsphademspneveremspbeenemspseenemspbefore

TheemsplifeemspboomemspinemspJapanemspcameemsptoemspaemsphaltemspinemsp1990emspMeanwhileemsptheemspEuropeanemspandemspUSemsplifeemspsectorsemspcontinuedemsptoemspbeemsptheemspmainemspgrowthemspdriversemspforemsptheemspglobalemspinsuranceemspmarketsemspwellemspafteremsptheemspturnemspofemsptheemspcenturyemspasemspsavingsemspproductsemspwereemspattractiveemspinemspanemspenvironmentemspemspofemspgraduallyemspdecliningemspinterestemspratesemspInemspcontrastemspnon-lifeemspmarketsemspgrewemspmoreemspslowlyemspemspinemsptheemspUSemspandemspinemspEuropeemspduringemsptheemspsameemspperiodemspasemspderegulationemspalternativeemspformsemspemspofemspriskemsptransferemspandemspcompetitionemspfromemsptraditionalemspsuppliersemspputemsppressureemsponemsppremiumemspratesemspThisemspchangedemsphoweveremspwithemsptheemspterroremspattackemspofemsp911emspwhichemsptriggeredemspanotheremsphardemspmarketemspSinceemspthenemsppenetrationemspinemspNorthemspAmericaemspandemspEuropeemsphasemspremainedemspvirtuallyemspunchangedemspinemsptheemspnon-lifeemspsectoremsp‒emspexcludingemsptheemsp911emspspikeemsp‒emspandemsphasemspdeclinedemspgraduallyemspinemsptheemsplifeemspsector

The second shift to Asia and the rise of emerging marketsemspEmergingemspmarketsemspespeciallyemspChinaemsphaveemspstartedemsptoemspmakeemspaemspbiggeremspcontributionemsptoemsppremiumemspgrowthemspsinceemsptheemspturnemspofemsptheemspcenturyemspThisemspbecameemspclearemspinemsptheemspaftermathemspofemsptheemspfinancialemspcrisisemspinemsp20082009emspwhichemspaffectedemspadvancedemspmarketemspnon-lifeemspgrowthemspandemspfurtheremspweakenedemsptheemspalreadyemspstrugglingemsplifeemspinsuranceemspmarketsemspSinceemsp2010emspEmergingemspAsiaemsphasemspbecomeemsptheemsplargestemspsourceemspofemspgrowthemspinemsptheemspglobalemspinsuranceemspmar-ketsemspalthoughemsppenetrationemsplevelsemsphaveemspbeenemspgraduallyemspincreasingemspacrossemspallemspregionsemsp

TheemspeconomicemspoutlookemspforemsptheemspadvancedemspmarketsemspremainsemspsolidemspTheyemspwillemspremainemspanemspimportantemspsourceemspofemspgrowthemspgivenemsptheiremspcurrentemspmarketemspshareemspofemsp78emsp(seeemspfiguresemsptoemsptheemspleft)emspHoweveremsptheemspabilityemspofemsptheemspinsuranceemspindustryemsptoemspofferemspsolutionsemspforemspnewemsprisksemspsuchemspasemspcyberemspandemsptoemspofferemspviableemspsavingsemspproductsemspwillemspbeemspvitalemspforemspfutureemspgrowthemsp

InemsptheemspshorteremsptermemspChinaemspisemsplikelyemsptoemspbecomeemsptheemspnextemspJapanemspforemspinsuranceemspmarketemspgrowthemspgivenemsptheemsprecentemspsteepemspincreasesemspinemsppenetrationemsplevelsemspandemspstrongemspeconomicemspgrowthemspDueemsptoemsptheemspsheeremspsizeemspofemspitsemsppopulationemspandemsptheemspeconomyemspChinaemspwillemspremainemsptheemspbiggestemspcontributoremsptoemspglobalemspinsuranceemspmarketemspgrowthemspamongemspemergingemspmarketsemspforemsptheemspnextemspdecadeemspatemspleastemspHoweveremspfiftyemspyearsemspfromemspnowemspwhenemspsigmaemspcelebratesemspitsemsp100themspanniversaryemsptheemspworldlsquosemspfastestemspgrowingemspinsuranceemspmarketemspcouldemspbeemspIndiaemspemspIndonesiaemspBrazilemspMexicoemspPakistanemspNigeriaemsporemspEthiopiaemspOnlyemsptimeemspwillemsptell

Lifeemspandemspnon-lifeemspinsuranceemspemsppenetrationemspinemspemsp1960‒2017emsp

Contributionemspofemspmainemspregionsemsp(inemsppercentageemsppoints)emspemsptoemsptotalemsprealemsppremiumemspgrowthemsp(inemspemspindicatedemspbyemspwhiteemsplineemspforemspyearsemspwithemspnegativeemspregions)emsp1960‒2017emspemsp

Regionalemspmarketemspsharesemsp1960‒2017

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1977

1997

2017

NorthemspAmericaemsp

AdvancedemspEMEAemsp

AdvancedemspAsiaemspPacificemsp

LatinemspAmericaemsp

EmergingemspEMEAemsp

EmergingemspAsia

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HowemspmuchemsplongeremspwillemspEmergingemspAsiaemspcontinueemsptoemspdriveemspglobalemsppremiumemspgrowth

Remarkemspsomeemspstructuralemspbreacksemspaffectemspseriesemspandemspcountryemspcoverageemspisemsplimitedemspforemsptheemsp1960semspandemsptheemsp1970semspemspSourceemspforemspallemspchartsemspSwissemspReemspInstitute

North America

Advanced EMEA

Advanced Asia Pacific

Latin America

Emerging EMEA

Emerging Asia