- Global insurance premiums increase in 2017 by 3.7% to EUR 3.66mn
- Property-casualty grows by 5.0%, almost twice as fast as life
- After a lost decade, premium growth should return to pre-crisis level – China is set to become the biggest market worldwide
According to projections by Allianz Research, the global premium volume last year rose to a new record sum of 3.66 trillion euros (excluding health insurance). Compared to 2016, the nominal increase adjusted for exchange rate effects is 3.7%. Although the growth rate of premium income accelerated slightly compared to the previous year (+ 2.9%), it lagged behind the expansion of economic activity (+ 5.9% nominal growth) for the second year in a row (see figure 1).
A huge protection gap
Global insurance penetration (premiums as a percentage of GDP) has thus fallen to 5.5% – the lowest value in the last 30 years. Compared to the pre-crisis years, it dropped by almost one percentage point (life and p&c, w/o health). This drop translates into “lost” premiums of around EUR 330bn in 2017 alone (11% of total global premiums). Roughly 95 percent of this “loss” is attributable to the regions of Western Europe and North America. Against the backdrop of increasing risks worldwide – climate and demographic change, increasing cyber incidents and geo-political tensions –, the fact that households, companies and investors are spending an ever smaller proportion of their income on protection is rather disturbing. This “protection gap” represents not only missed growth opportunities for the industry but also a less economically beneficial outcome for society as a whole.
Figure 1 5 Oil price central scenario 2019