Return to Uzone News Portal
Uzone.id – The worldwide insurance industry is experiencing a significant surge, with growth projected to reach 7.8% in 2023. This marks the fastest increase since 2006, just before the global financial crisis.
A recent report by Allianz, “The Global Insurance Report,” highlights this positive trend. Insurance companies worldwide collected a combined premium of €6.3 trillion in 2023, including €2.62 trillion for life insurance, €2.15 trillion for general insurance, and €1.43 trillion for health insurance.
Over the past three years, global insurance premiums have risen by an impressive €21 billion, or 21%. However, rising inflation rates are causing concern. While insurance premiums have increased, they haven’t kept pace with inflation, leading to a decline in the purchasing power of insurance coverage.
In contrast, to the dominance of the insurance segment in driving premium growth in 2022 the year 2023 displays a more balanced trend, across various sectors.
The three segments recorded almost the same increase, with life insurance increasing by 8.4%, general insurance by 7.0%, and health insurance by 6.6%.
The recovery of the life insurance segment which only grew by 3.1% in 2022 received a major boost from Asia (excluding Japan) which increased by 16.2% and is now the largest life insurance market in the world, surpassing Western Europe which experienced global market growth with total 30.0%.
In general insurance, North America (+7.1%) remains the largest market (global market share: 54.2%). Premiums in Asia (excluding Japan) increased by 6.6%, and global market share in the region remained at 15.5%.
Closing the Gap
Over the next decade, the global insurance market is expected to grow at an annual rate of 5.5%, that is, at the same rate as global GDP.
In previous decades, insurance growth lagged behind economic growth. The weights of the three segments will shift. The general insurance segment will grow at 4.7% per annum, after 5.0% per annum in the previous ten years, as inflation-related price increases ease.
The healthcare segment is also expected to grow slightly slower – but at 7.3% per year, increases remain high.
In contrast, the life insurance segment may grow at 5.1% per annum (up from 3.5% per annum), benefiting from higher interest rates. Overall, global premium pools will increase by almost EUR5 trillion.
Most of this growth will be in the life insurance segment (EUR1,887 billion) with Asia (excluding Japan) remaining the growth engine for the global life insurance business (+7.3% p.a.).
The region is expected to account for half of absolute premium growth (EUR928 billion), more than North America (EUR377 billion) and Europe (EUR323 billion) combined.
While China (+7.7% p.a.) will still dominate the region in absolute terms, the real growth champion over the next decade will likely be India (+13.6% p.a.).
In the general insurance segment, additional premiums will reach EUR1,427 billion by 2034.
Although growth in Asia (excluding Japan: 7.1% per year) is significantly higher than in North America (3.8% per year), in absolute terms, the latter region will dominate: EUR 584 billion additional premium in North America compared to EUR376 billion in Asia (excluding Japan) and EUR184 billion in Western Europe.
“The prospect of good premiums should not make the industry complacent,” said Arne Holzhausen, one of the report’s authors.
“The biggest challenge for the industry is to maintain its relevance against increasingly intervening conditions. Increasing polarization and inequality threaten to undermine the social fabric. How to navigate these challenges, maintaining its social relevance as a force for equality and unity is the main task for the insurance industry in the coming years next year,” he closed.
