Global insurance premiums fell by 0.8% last year, as a growth in non-life insurance premiums was more than cancelled out by a fall in life insurance premiums, Swiss Re said yesterday.
The reinsurer's latest Sigma survey found that non-life premiums expanded by 1.9% as a result of solid economic growth in emerging markets and selective rate increases in some advanced markets. Emerging markets saw 8.6% premium growth, while advanced markets recorded only 0.5% premium growth overall with demand for cover dampened by the eurozone crisis and the weak economy in the US.
Daniel Staib, one of the study's authors, said: 'Non-life premium growth in the advanced markets has been supported by gradual rate increases in personal lines of business and in regions affected by large natural catastrophes.'
He added that, despite the adverse environment in 2011, non-life insurers still had a sound capital position and the industry was in a strong position to grow 'steadily' in the future.
A 2.7% fall in life insurance premiums came despite many markets showing firm growth as premiums fell steeply in a few large markets. In particular, there was a steep decline in in-force life insurance business in Western Europe while tighter regulations on bancassurance - where insurance is offered through a bank - in China and India reduced emerging market life premiums by 5.1%.
Despite an overall fall of 2.3% in life premiums in advanced markets, premiums actually grew in the two largest markets, US and Japan, with a rebound in premiums for new life insurance business in the US and stronger sales of individual whole life policies in Japan.
Emerging regions such as Latin America and the Middle East also showed 'healthy, continuing' growth, although Swiss Re noted that insurance presence in the Middle East remained very low compared with other emerging markets.
Swiss Re now expects moderate overall premium growth this year, as slowed economic growth in advanced markets weighs on insurance demand.
However, robust economic growth and hardening prices in emerging markets are expected to support non-life premium growth, while life premiums in India and China will revive as insurers adapt to new regulations on bancassurance.
Kurt Karl, Swiss Re's chief economist, said: 'Last year was not a great one for premium growth, but 2012 should be a lot better as rates continue to improve in non-life markets and India and China return to robust growth in life markets.'