Non-life premium growth increased by 2.6 percent in 2012, buoyedby economic expansion in emerging markets and selective priceincreases in advanced markets that are overriding depressedinterest rates, a recent study shows.

“Premium growth held up well given the challenging economicenvironment,” says Daniel Staib, one of the authors of the latestSwiss Re sigma study.

Worldwide non-life premiums hit $1,992 billion last year,although the figure was still well under the growth rateexperienced prior to the decade's economic crisis. Non-lifeinsurance premium growth dropped to nearly five percent in 2008before it began to rebound and grow by about 2.5 percent in 2010 —still far from the 10 percent premium growth seen by the non-lifeinsurance sector in 2002.

“Premium growth expectations for the short-term remain belowpre-crisis trends,” says study co-author Mahesh Puttaiah. “Thenon-life side is more positive since the sector will benefit fromthe strong economic performance of emerging markets and selectiverate increases in advanced markets. However, rate increases willlikely be moderate given the prevailing surplus capacity in themarkets.”

The non-life insurance industry in emerging markets outperformedindustrialized nations in 2012 with a growth rate of 8.6 percent,owed to mounting urbanization, an expanding middle class andincreased market penetration in those countries.

“The rise in importance of emerging Asia in the globaleconomy and insurance markets witnessed over the past 20 years isset to continue for at least another decade,” says Kurt Karl, SwissRe's chief economist.

The sigma study of 147 insurance markets found that non-lifepremiums in the U.S. jumped by 1.5 percent from 2011 to 2012, by 2percent in the U.K. and by 8.2 percent in Hong Kong. However, Italyand the United Kingdom experienced a 3.9 percent and 0.3 percentdecline, respectively. Overall, non-life premiums for the U.S., UK,Western Europe and Hong Kong totaled $1,648 billion lastyear.

Meanwhile, premiums in Latin America and the Caribbean grew by7.8 percent in 2012, by more than 10 percent in Russia and India,and by 9 percent in the United Arab Emirates. Of the fivedeveloping regions listed in the study — Latin America and theCaribbean, Central and Eastern Europe, South and East Asia, Africa,and the Middle East and Central Asia — which held $344 billion innon-life premiums last year, only Africa's market saw a slightdecrease in 2012.

However, says Karl, “Demographic patterns suggest that by 2062,Asia's share in the world population will actually decrease from 60percent to 53 percent, mainly due to the developments in China,where the working age population will start to contract from 2018.At the same time, Africa's population share is projected toincrease from 15 percent currently to roughly 27 percent. Thispositions Africa well, from a demographic point of view, to becomean important part of the global insurance markets over the nextfifty years.”

Non-Asian emerging market share in non-life insurance isexpected to increase by 2 percent by 2023, reports the study, whilethe North American and Oceania market is predicted to shrinkslightly by five percent.