Global property & casualty insurance premiums expected to more than double to USD 4.3 trillion by 2040, Swiss Re Institute forecasts
EQS Group-News: Swiss Re Ltd
/ Key word(s): Research Update/Study results
Zurich, 6 September 2021 - Global P&C premiums are expected to more than double to USD 4.3 trillion in 2040 from USD 1.8 trillion in 2020, as the P&C portfolio composition is expected to shift from lower-risk motor insurance towards higher-risk property and liability lines, according to Swiss Re Institute's sigma study, More risk: the changing nature of P&C insurance opportunities to 2040. Property insurance is forecast to become the fastest growing line of business. Motor, although its share is shrinking, is expected to remain the largest of all P&C lines, with premiums forecast to almost double by 2040. Property insurance is forecast to grow by 5.3% annually with global insurance premiums rising to USD 1.3 trillion in 2040 from USD 450 billion in 2020. Economic development will remain the key driver of rising property premiums, contributing 75%, or up to USD 616 billion of new premiums. Climate-related risks are expected to result in a 22% increase in global property premiums, or up to USD 183 billion, over the next 20 years as weather-related catastrophes will likely become both more intense and frequent. Jerome Haegeli, Swiss Re's Group Chief Economist, said: "Promoting the conditions for long-term sustainable growth is particularly important in the face of climate change, which poses the biggest long-term threat to the global economy. If we are to build a sustainable insurance system that allows society to manage and absorb future risks, we need to make risks and opportunities quantifiable. Our work is also vital for policy makers with whom we share the aim of making economic growth insurable." As social inflation is expected to drive up the frequency of large verdicts and settlements, especially in the US, liability premiums are forecast to grow by 4.7% per year on average to USD 583 billion until 2040 from USD 214 billion in 2020. Additional areas of long-term growth potential in liability come from climate change effects, artificial intelligence, and social and legal changes. Motor will remain the largest line of business Gianfranco Lot, Head Globals Reinsurance at Swiss Re, said: 'With the global portfolio shifting from lower risk motor insurance to higher risk lines, P&C insurance business will become more volatile. At the same time, risk modelling will become more complex, which will lead to higher capital requirements and an increased demand for reinsurance. In this fundamentally different risk environment, reinsurers will play a crucial role in keeping risks insurable.' Notes to editors
Growth rates: Property fastest growing line, followed by liability. Technological developments to cap growth in motor, partially offsetting positive impact of other socio-economic forces.
Note: * Motor and property risk pool 2040 projections shown are upper bound of forecast range Source: Swiss Re Institute
Main growth drivers: Economic development will remain the key driver of premium growth across all lines of business over the next 20 years. In property, climate risks will raise property claims and premiums
*na = implicit quantification only Source: Swiss Re Institute
Swiss Re
How to order this sigma study: The English version of the sigma 4/2021, 'More risk: the changing nature of P&C insurance opportunities to 2040', is available in electronic format. You can download it here: https://www.swissre.com/institute/research/sigma-research/sigma-2021-04.html For further information please contact Swiss Re Media Relations: + 41 (0)43 285 7171 or Media_Relations@Swissre.com. Cautionary note on forward-looking statements
End of Media Release |
Language: | English |
Company: | Swiss Re Ltd |
Mythenquai 50/60 | |
8022 Zurich | |
Switzerland | |
Phone: | +41 (0) 43 285 71 71 |
E-mail: | Media_Relations@swissre.com |
Internet: | www.swissre.com |
ISIN: | CH0126881561 |
Valor: | 12688156 |
Listed: | SIX Swiss Exchange |
EQS News ID: | 1231410 |
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1231410 06.09.2021