Swiss Re’s annual sigma report on premium volumes and growth trends for 2018 reveals that global life premiums increased to roughly USD 2.7 trillion in 2017, while global non-life premiums rose to about USD 2.2 trillion, while growth in both the life and non-life sectors slowed, partly due to falling life premiums in advanced markets such as the U.S. or Western Europe. Nevertheless, emerging markets remain an important driver of global premium growth.

China continued to be among the world’s fastest growing insurance markets, particularly in the life market which grew by 21% in 2017, well above its ten-year average of 14%. China is now the second largest life market globally after the US and accounts for more than half of emerging market life insurance premiums written, or 11% of the world total.

Life premiums in advanced markets, which fell 2.7% in 2017, were the primary cause of the drag on global growth. The North American life market declined by 3.5%, driven by supply side factors, as players exited the retirement savings business, including variable annuities. Among advanced Asian markets, which were down 2.1%, expectations of lower mortality rates have delayed life insurance purchases in Japan.

The life sector in advanced markets has failed to recover from the 2008 financial crisis. Well documented factors, such as the depressed economic environment, stagnant wages combined with low-interest rates and changing solvency regimes made traditional savings products with interest rate guarantees unattractive both for consumers and for life insurers.

Over the next few years, the Swiss Re Institute predicts that global life insurance premiums will rise, driven by strong growth in China. However, profitability continues to be under pressure due to low-interest rates, increasing competition and regulatory changes.

The report can be accessed on this page.