Executive Summary

  • The global insurance industry entered 2020 in good shape: In 2019, premiums increased by +4.4%, the strongest growth since 2015. The increase was driven by the life segment, where growth sharply increased over 2018 to +4.4% as China overcame its temporary, regulatory-induced setback and mature markets finally came to grips with low interest rates. P&C clocked the same rate of growth (+4.3%), down from +5.4% in 2018. Global premium income totaled EUR3,906bn in 2019 (life: EUR2,399bn, P&C: EUR1,507bn).
  • Then, Covid-19 hit the world economy like a meteorite. The sudden stop of economic activity around the globe will batter insurance demand, too: Global premium income is expected to shrink by -3.8% in 2020 (life: -4.4%, P&C: -2.9%), three times the pace witnessed during the Global Financial Crisis. Compared to the pre-Covid-19 growth trend, the pandemic will shave around EUR358bn from the global premium pool (life: EUR249bn, P&C: EUR109bn).
  • In line with our U-shaped scenario for the world economy, premium growth will rebound in 2021 to +5.6% and total premium income should return to the pre-crisis level. The losses against the trend, however, may never be recouped: although long-term growth until 2030 may reach +4.4% (life: 4.4%, P&C: 4.5%), this will be slightly below previous projections.
  • Covid-19 is seen as a game-changer but in insurance it may rather reinforce existing trends, namely digitalization and the pivot to Asia, which will emerge faster and stronger from Covid-19. With growth of +8.1% p.a. until 2030, Asia (ex Japan) is expected to grow almost twice as fast as the global market. It will add a massive EUR1,277bn to the global premium pool, twice as much as North America and four times as much as Western Europe. Asia's rising middle class will increasingly play the role of the consumer of last resort with huge pent-up demand, reflecting weak social security systems and protection gaps in natural catastrophes, health, retirement and mortality. As a consequence, the region’s share (without Japan) of the global premium pool will rise from 24.2% (2019) to 35.3% (2030).
  • Another trend that may “benefit” from Covid-19 is ESG. If the corona crisis taught the world anything, it is the need for more resilience. Increasingly, ESG will be seen not only as an indispensable tool to screen long-term risks to improve investment returns but also as an insurance business-enabler. As more and more companies implement ESG strategies, the demand for accompanying products and services is set to rise rapidly. A new era of “impact underwriting” emerges.
Michaela Grimm
Senior Economist
Arne Holzhausen
Head of Wealth, Insurance and Trend Research
Patricia Pelayo-Romero
Expert, Insurance
Markus Zimmer
Senior Expert, ESG