Emerging Asia will see the strongest annual growth of 12% in non-life insurance and 13% in life insurance in 2016 and 2017, according to global reinsurance giant Swiss Re in its report entitled “Global Insurance Review 2015 and Outlook 2016/17”.
In the non-life sector, emerging Asia will contribute to emerging markets worldwide and hence global non-life growth in 2016 and 2017. Globally, emerging markets will see non-life insurance rise by 7.9% and 8.7%, respectively, after a 5.6%-gain in 2015.
China will continue to support growth, and India and Southeast Asia are also expected to contribute. Competitive pressures will intensify in China and Malaysia with ongoing motor de-tariffication in those markets, said the report. Global premium growth is forecast to improve to 3.0% in 2016 and 3.2% in 2017, from 2.5% this year.
China key growth market for life and health
Globally, primary life insurers face downside risks from the modest global growth outlook, persistently low interest rates, volatility in financial markets and regulatory changes. Nevertheless, global real premium income is forecast to rise by 4.0% and 4.2% in 2016 and 2017, respectively.
While in emerging markets, life premiums are forecast to grow by 10.7% in both years on the back of stronger economic growth, growing populations, urbanisation and a rising middle class. Again, emerging Asia will have the most robust growth, of about 13%.
Life and health premium growth in the emerging markets will be supported by strong expansion in China, where the major driver will be accommodative government policies, which will offset slower GDP and income growth. In the rest of emerging Asia, economic headwinds will cap premium growth in life and health insurance, but at a high rate.