Munich Re, the world’s biggest reinsurer, said it expects global primary insurance premiums to rise 3 percent this year and 3.5 percent in 2014, driven by higher life sales.
As “key industrialized countries improve” in the second half of this year and next year, there will be more demand for insurance, spurring an increase in premium growth from the 1 percent recorded last year, the Munich-based reinsurer said in a statement.
While global premiums fell in 2011 on lower life sales, according to a study by Swiss Re Ltd., Munich Re predicts that part of the business will rebound.
“The global economic recovery is also benefiting the insurance industry,” Michael Menhart, Munich Re’s chief economist, said in the statement. “We expect the economies of key industrialized countries to improve in the second half of 2013 and in 2014,” which will drive insurance demand, he said.
The reinsurer, which helps primary insurers shoulder risks, expects reinsurance premium growth to decline to 1 percent this year from 3.3 percent in 2012 after natural catastrophes in the previous years pushed up prices.
The property- and casualty-insurance market as a whole will grow by approximately 50 percent this year compared with 2012 to 1.85 trillion euros ($2.38 trillion), and the life-insurance market by almost two-thirds to 3.1 trillion euros, Munich Re said.
“Growth in insurance and reinsurance in emerging countries will be significantly stronger than in industrialized countries,” according to Munich Re. Meanwhile, Europe and the industrialized countries of the Asia-Pacific region will continue to spur growth, it said.
The share of total primary insurance premiums in industrialized countries will fall to about 73 percent by 2020 –- about 10 percentage points lower than in 2012, Munich Re said. The amount generated by the emerging countries in Asia will move up from 8 percent to 16 percent, according to the company.