Insurers Worldwide Continue To Recover, Swiss Re Says
NU Online News Service, June 28, 3:38 p.m. EDT?The global insurance industry is continuing on its path to recovery, with insurers from around the world expected to report further progress this year, according to a forecast by Swiss Reinsurance Company.[@@]
Swiss Re's 2004 outlook on the sector was described in the company's new report, "World insurance in 2003," which examines insurance markets of 152 countries.
Reviewing the last year's results globally, the Swiss Re report noted that rate hikes?together with more stringent underwriting standards and comparatively fewer extreme losses?helped generate a marked improvement in property-casualty underwriting results in 2003.
According to the report, prepared by Swiss Re's research arm, Sigma, worldwide premiums for p-c as well as life insurance businesses rose two percent to $2.94 trillion last year, adjusted for inflation.
In the p-c sector, both premiums as well as the overall financial results improved, with premium volumes rising 6 percent to $1.268 trillion. The study noted that the vast majority of the premiums were still generated in industrialized nations, which accounted for almost 90 percent, while "emerging markets" accounted for roughly 10 percent of the overall premium volumes.
Among the industrialized countries, the United States reported the lion's share of the p-c premiums last year, at $574.6 billion. It was followed by Japan, which reported $97.5 billion in premiums, and the United Kingdom, with $91.9 billion. Germany came next, with $94.1 billion and France, with $58.2 billion.
The six percent premium-volume rise in the worldwide p-c industry last year is less than what was recorded in 2002, but Swiss Re pointed out that this six percent jump is still twice as high as the 10-year average, with prices continuing their upward trends in virtually all regions.
Swiss Re also said it is still seeing "substantial rate rises," particularly in third-party liability. The company said that since 2000, p-c premium income has grown at a cumulative real rate of 22 percent, mainly on the strength of raises in premium rates.
Looking ahead, Swiss Re predicted that the pick-up in the global economy, as well as the expected rise in both interest rates and stock markets, would further set the stage for higher demand in p-c businesses.
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