“Thus, 2021 represents an unusual end to the past decade in which growth was much lower (+3.6% per year on average) and driven by Asia, which accounted for 40% of all additional premiums, more than half of them written in China. As a consequence, China’s global market share doubled to 12%,” the report said.
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For this year, Allianz analysts expect the Ukraine-Russia conflict to impact the global insurance industry, forecasting premium income to grow by roughly 1 percentage point slower than initially assumed as the conflict takes its toll on economic activity and confidence, even as inflation supports the top line.
“Overall, we now expect global premium income to grow by +4.8% in 2022, with life and P&C [property and casualty] developing almost in step (+4.9% and +4.6%, respectively). This figure must be considered against the backdrop of a global inflation rate of 6.2% this year,” the analysts said.
Despite the uncertainties this year, Allianz analysts remain optimistic as they expect climate change and demographic change to be the main drivers of risk protection demand. They also forecast a +4.8% annual growth over the next 10 years (life: +4.9%; P&C: +4.6%), corresponding to an increase in premium income by +67% or €2.8 trillion, of which under €1.8 trillion will be generated by the life segment and over €1 trillion by the P&C segment (+63%).
“The pandemic and the war in Ukraine are wake-up calls for better risk management and even more demand for protection,” said Ludovic Subran, chief economist of Allianz. “The industry must succeed in maintaining its economic and social relevance, offering innovative solutions for new and rising risks. The questions of insurability and affordability are likely to become increasingly urgent in the coming years. This requires a level of creativity and collaboration with all stakeholders, customers, carriers, and policymakers even beyond previous efforts.”