The Sigma report issued by the Swiss Re Insurance Institute expected that the volume of global premiums would exceed 7 trillion US dollars for the first time in 2022, due to price tightening.
The report also expects a strong growth of 6.1% in total insurance premiums (property and life) in 2022, based on the increase in price tightening in property insurance to meet high inflation and the strong growth of premiums in emerging markets, so the premium sizes will be 17% higher than they were It was at the beginning of the emerging Corona crisis “Covid-19”, which reflects the flexibility of insurance markets in dealing during the epidemic period and beyond.
Growth in insurance premiums due to increased inflation
The Sigma report emphasized that price tightening in commercial insurance branches will lead to a strong growth in the nominal value of insurance premiums, while the effect of inflation will translate into a lower real growth rate. And Europe, the real value of global insurance premiums will rise by 0.8% this year.
According to the report, global property insurance premiums will grow by 2.2% in 2023, and this depends mostly on price tightening, especially in commercial insurance branches, and premium growth in emerging markets is likely to exceed that of advanced economies this year and next, with real growth occurring It is estimated at 3.0% in 2022, and 4.2% in 2023, and it is also likely that the main driver of this growth will be the strong demand for short-term medical insurance as a result of increased awareness of the importance of health insurance in the wake of the experience of the emerging Corona epidemic “Covid-19” “.
Higher interest rates boost insurance investments
The report also expected a movement of interest rates upwards, which would enhance the returns on investments of insurance companies in the long term. The profits of the property insurance sector will be subject to some pressure this year, as the return on equity is expected to range between 5% and 6% in 2022, down from 6% in 2021, then a 6.6% recovery in 2023 with improved underwriting results and investment returns.
The report indicated that the economic slowdown and high inflation for several years will lead to a decrease in the real value of premium income and an increase in claims costs. Bonds of property insurance companies for progressively higher returns.
slowdown and high inflation will reduce the real value of premium income and increase
The Sigma report issued by the Swiss Re Insurance Institute expected that the volume of global premiums would exceed 7 trillion US dollars for the first time in 2022, due to price tightening.
The report also expects a strong growth of 6.1% in total insurance premiums (property and life) in 2022, based on the increase in price tightening in property insurance to meet high inflation and the strong growth of premiums in emerging markets, so the premium sizes will be 17% higher than they were It was at the beginning of the emerging Corona crisis “Covid-19”, which reflects the flexibility of insurance markets in dealing during the epidemic period and beyond.
Growth in insurance premiums due to increased inflation
The report indicated that the economic slowdown and high inflation for several years will lead to a decrease in the real value of premium income and an increase in claims costs. Bonds of property insurance companies for progressively higher returns.
