Michael Menhart, the chief economist of Munich Re, made those predictions last week in a look at how the reinsurer expects world insurance markets to perform from now through 2025.
Munich Re’s expectations about world insurance markets could have a direct effect on how well some insurers and insurance markets do, because the company’s views could shape how it allocates its reinsurance capital and insurance operations expertise.
World insurance premium revenue will grow an average of 4.5% per year over the next nine years, to $6.9 trillion in 2025, Munich Re estimates. The company sees property-casualty premium revenue growing 4.5% per year and life premium revenue growing 5% per year.
If the Munich Re forecasters are correct:
North American life premium revenue will grow 2% per year.
Western European life premium revenue will grow 1.3% per year.
Life premium revenue in Brazil, China, the Philippines, Indonesia and the United Arab Emirates will grow more than 8% per year.
Munich Re prepared a chart showing how it expects life premiums to change in 15 markets that it classifies as “emerging” insurance markets. The United Arab Emirates ranked first, with a projected annual life premium growth rate of 10%.
Low interest rates and high life insurance penetration rates will slow growth in developed countries, while rising living standards and increasing insurance coverage requirements will promote growth in emerging markets, Menhart writes.
— Read Munich Re rebels against ECB with plan to store cash in vaults on ThinkAdvisor.