Monday, May 17, 2021

Allianz expects global insurance industry to record strong growth in 2021

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KUALA LUMPUR, May 17 — Strong growth is expected for the global insurance industry in 2021, mirroring the expected worldwide economic development.

In its Global Insurance Report 2021, Allianz Research said global premiums are expected to increase 5.1 per cent, while the United States (5.3 per cent) and China (13.4 per cent) are likely to be the two main growth engines.

“After the sharp decline in the previous year, the recovery in the life segment (5.7 per cent) will be somewhat stronger than in the property segment (4.2 per cent).

“However, like the pandemic-related slump, the recovery will be uneven,” said the report.

While some regions, especially Asia, will almost seamlessly resume their pre-crisis development as early as 2021, the recovery elsewhere will be much more uncertain, it added.

The report said that this applies above all to Western Europe, in addition to Japan.

This is partly due to the handling of the Covid-19 crisis itself, continued lockdowns due to high case numbers, delayed vaccination campaigns due to supply bottlenecks.

However, it also partly reflects the late effects of the pandemic, it said.

According to the report, low claims expenses in the previous year, especially in motor insurance, are leading to lower premium momentum this year, as the practice of retrospective pricing based on turnovers is having a similar effect in some industrial insurance lines.

In life insurance, the conditions are significantly more favourable, said the report.

Many households have high additional savings, but here, too, it remains questionable whether a dramatic turnaround can be expected as early as this year following the deep slump in 2020 and the continuing uncertainty about the progress of the pandemic, the report noted.

“With the exception of Eastern Europe, the prospects for emerging markets, where there has been no slump in the life business in recent years, are not bad either.

“Here, the strong development of recent years is simply likely to continue,” it said.

In view of the still rudimentary nature of some social security systems and progressive social and demographic change, it added that individual retirement provision is becoming increasingly important in these markets as well.

In 2020, the report said, global premium income fell by only 2.1 per cent and property insurance recorded a small increase of 1.1 per cent, while life business slumped by 4.1 per cent.

Overall, however, this decline was significantly steeper than in 2009 (-1.1 per cent) in the aftermath of the financial crisis. — Bernama




Source: Malay Mail

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