Insurance premium growth to remain positive in 2020

Insurance premium growth will remain positive in 2020, and bounce back strongly after a COVID-19 induced slump, particularly in China, research from the world's leading reinsurance company Swiss Re showed.

The fast adoption of digital distribution channels, further liberalization of the life sector, and rising risk awareness will support the recovery, according to the research. For instance, the crisis is raising awareness of the value of insurance across the lines of business and client groups globally. Pandemics will not be fully insurable, but the COVID-19 crisis will raise awareness of the associated financial risks and spark innovation for new covers.

"Overall, we expect China to contribute most (0.7 percentage points) to life premium

growth over the next two years, followed by the rest of emerging Asia (0.2 percentage points). And the contribution from all other regions will be flat to negative," said Jerome Jean Haegeli, chief economist of Swiss Re Group.

In other emerging regions, with many key markets like Brazil, Mexico, Turkey and South Africa already in slowdown mode before the pandemic, premium growth will turn sharply negative in 2020. And the downturn is expected to be most severe in emerging Europe, with a 10 percent contraction in premiums, the research showed.

Meanwhile, the COVID-19 crisis has also accelerated some paradigm shifts and new insurance opportunities.

"With Asian countries expected to recover more quickly, we believe the ongoing shift in the global insurance market opportunity in emerging Asia and China in particular, will continue," said Haegeli.

The research forecasts that China's share of global premiums will continue to rise rapidly to an estimated 18 percent in 2030, still only half the share of the US. However, excluding medical insurance premiums, China remains on track to become the largest insurance market globally by the mid-2030s.