Swiss Re Ltd : New Swiss Re sigma study on world insurance in 2011 shows non-life insurance premiums continued to grow in 2011 despite an overall decline in premiums
27 June 2012, Zurich
06/27/2012| 04:19am US/Eastern
Non-life insurance premiums continued to grow 1.9% in 2011,
on the back of solid economic growth in emerging markets
and selective rate increases in some advanced markets.
Life insurance premiums declined 2.7%. Premiums dropped
sharply in Western Europe, China, and India, while growth
resumed in the US.
Going forward, non-life premiums are expected to continue
expanding moderately in the advanced markets. Life
insurance premium growth in the emerging markets will
Swiss Re's latest sigma study reveals that global
overall premiums declined 0.8% in real terms in 2011.
While non-life premiums expanded 1.9% on solid economic
growth in emerging markets and selective rate increases in
some advanced markets, global life insurance premiums fell
2.7%. Capital and solvency remained solid despite
extraordinarily costly natural catastrophe events and
historically low interest rates that lowered insurers'
Non-life premium growth continued in 2011
Global non-life insurance premiums grew 1.9% in 2011. In the
emerging markets, non-life premium growth remained robust at
8.6%, backed by strong economic expansion. The advanced
markets recorded marginal 0.5% growth, supported by rate
increases in some regions and lines of business. However, the
unfolding recession in Europe and the weak economy in the US
dampened demand for insurance cover. Daniel Staib, one of the
authors of the study, says: "Non-life premium growth in
the advanced markets has been supported by gradual rate
increases in personal lines of business and in regions
affected by large natural catastrophes. Despite the adverse
environment in 2011, non-life insurers' capital position
remained sound, putting the industry in a strong position to
grow steadily in the future."
Life premiums decreased 2.7% worldwide
Life insurance premiums declined overall. However, many
markets continued to show firm growth. In fact, the decline
was primarily caused by a few large markets where insurance
premiums fell steeply.
In the advanced markets, premiums dropped 2.3% overall, even
though premiums grew in the US and Japan, the two largest
markets. In the US, premiums from new life insurance business
rebounded, led by strong demand for variable annuity products
with guarantees. In Japan, sales of individual whole life
policies strengthened and annuity products recovered.
However, the advanced markets suffered from a steep decline
of in-force life insurance business in Western Europe.
Tighter regulations on bancassurance distribution in China
and India, the two largest emerging markets, led to an
overall decline in emerging market life premiums of 5.1%.
However, other emerging regions such as Latin America and the
Middle East showed healthy, continuing growth, even though
insurance penetration in the Middle East still remains very
low compared with other emerging markets.
Regarding profitability, Staib explains: "The
profitability of the life insurance industry has stabilized,
but remains low. Low interest rates remain the key issue for
the life insurance sector, affecting investment returns and
eroding the profitability of guarantee products."
Outlook: non-life insurance ready for take-off
Going forward, moderate premium growth overall is expected in
2012. In non-life, robust growth in the emerging markets and
hardening prices are expected to support premium growth.
However, the turn of the pricing cycle will likely be gradual
and limited to certain markets and lines of business.
Slower economic growth in the advanced markets will weigh on
insurance demand for life and non-life insurance. However,
life insurance premium growth is set to revive in the
emerging markets. In India and China, insurers are already
adapting to the new regulations by consolidating their
distribution channels and restructuring products. Elsewhere
in the emerging markets, life premium growth is set to
continue to benefit from rising income and increasing risk
awareness. Savings products and credit life insurance in
particular are expected to make further inroads into Latin
America. Very low interest rates will continue to be a
challenge for the entire insurance industry.
"Last year was not a great one for premium growth, but
2012 should be a lot better as rates continue to improve in
non-life markets and India and China return to robust growth
in life markets," says Kurt Karl, Swiss Re's Chief
This sigma study is the first public assessment of
the performance of global insurance markets in 2011. The 84
markets where data or estimates for 2011 are available,
account for 99% of global premium volume. Overall, the report
is based on 147 insurance markets.
Notes to editors:
The Swiss Re Group is a leading wholesale provider of
reinsurance, insurance and other insurance-based forms of
risk transfer. Dealing direct and working through brokers,
its global client base consists of insurance companies,
mid-to-large-sized corporations and public sector clients.
From standard products to tailor-made coverage across all
lines of business, Swiss Re deploys its capital strength,
expertise and innovation power to enable the risk taking upon
which enterprise and progress in society depend. Founded in
Zurich, Switzerland, in 1863, Swiss Re serves clients through
a network of over 60 offices globally and is rated
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How to order this sigma study:
The English, German, French, and Spanish versions of
sigma study No 3/2012, "World insurance in
2011: non-life ready for take-off" are available for
download on our sigma
section. The Chinese and Japanese versions of the
sigma will also be available on the website soon.
Printed editions of sigma No 3/2012 in English, French,
German, and Spanish are also available now. The printed
versions in Chinese and Japanese will be available shortly.
Please send your orders, complete with your full postal
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How to obtain a copy of this sigma press
The English, German, French, Spanish, and Portuguese versions
of this sigma press release are available
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Japanese, and Korean versions will also be available there
 All growth rates are in real terms, ie adjusted for
inflation (measured based on local consumer price indices).