While the global insurance industry has improved over the last 12 months with Asia being a huge driver, Australia is set to slip in growth ranks, according to Munich RE.
The data published in the ‘Munich RE Economic Research May 2016′ report highlighted that the global sector is expected to grow around four per cent over the next two years.
The report said despite an uncertain economic environment, emerging markets were playing “high catch-up” on life insurance.
It cited that although life insurance was increasingly being taken out in emerging countries, industrial countries would continue to suffer from low interest rates, and Australia was one of them.
In the global insurance market, China was ranked 10th and Australia 12th in 2005, in terms of premium volume. While Australia climbed to 11th place in 2015, China grew to third, behind the US and Japan.
The report projects that in 2025 China will be the second largest insurance market in the world, the US will maintain their top position, and Australia will slip to 13th.
The report said property-casualty insurance premiums would grow by around four per cent (close to three per cent in real terms) over the next two years, and life insurance would growth by 4.5 per cent, with higher growth expected in developed markets.
The Munich RE report projected that by 2025, more than a quarter of global overall insurance premiums would be generated from emerging countries, mainly from Asia.
It noted, “continued high demand for insurance was likely to lead growth rates of over 10 per cent in 2016” and 9.5 per cent in real terms in 2017, while in Latin America premiums would grow by 0.5 per cent (in real terms).
