Premiums in the global insurance and reinsurance market grew by 0.9% to $4.9 trillion last year, according to Aon Benfield.
Publishing the latest edition of its Insurance risk 2014 report, the reinsurance intermediary revealed that, as at year end 2013, global premiums stood at an all-time high, boosted by the property and casualty, and life and health industry.
Property casualty premium increased 3.5% ($1.4trn), and life premiums shrunk by 2.0% to $0.2trn while health premiums grew by 4.5% to $3.3trn.
'There are many bright spots within today's rapidly evolving insurance marketplace,' said Stephen Mildenhall, global chief executive officer of analytics for Aon.
For many insurers, Big Data is the presumed answer to the question of how to grow profitability in an environment with capital levels, Aon said. The market continues to embrace and adopt Big Data concepts in pricing and underwriting.
The report said that Big Data for insurance often related to Behavioral Data, with the industry engaging in an active search for more detailed and more predictive variables to add to underwriting and pricing algorithms.
'The growth imperative continues to stress many industries, particularly in mature markets. For insurers, the efficiency gains from Big Data often serve to redistribute risks, but not to grow the pie - creating clear winners and losers,' the report stated.
The report also highlighted other emerging trends including, the effects of technology on motor insurance, new capital demands in the US health market and the rising frequency of cyber attacks.
Looking ahead, Aon predicted that global property casualty insurance premium would grow over the next five years, for the overall insurance market and for motor, property and liability.
It said: 'These projections are based on a weighting of historic premium growth rates with projected country GDP and population estimates. By 2018, we expect the global insurance market to grow by 18% to a total direct written premium of $1.6trn.
'Motor insurance will remain the largest property casualty segment, accounting for 47% of total direct written premium, followed by property (33%) and liability (21%).'
By country, the US will remain the largest property casualty insurance market, representing an estimated 37% of global premium. China will surpass Japan to become the second largest market, with an expected 9% of premium.
Mildenhall added that there were many desirable areas for profitable growth in the market today.
He said: 'The continued flow of cheaper alternative capital into the industry provides a competitive cost-advantage to early adopters. The potential pay-off to innovation is higher today than it has been for many years.'
