Emerging Markets Driving P-C Growth, Says Swiss Re

Global non-life premium growth slowed in 2007, but technical results were favorable and profitability remained sound, according to a new Swiss Re sigma study.

The study, "World Insurance in 2007: Emerging markets Leading the Way," noted that premium volume grew in emerging markets for the year, but retreated in industrialized markets.

For industrialized countries, non-life premiums were reported at $1.5 trillion, a 0.3 percent decline from 2006. Premiums declined 1.3 percent in the United State, and 2.3 percent in the United Kingdom. Japan and Germany also posted declines. France and Italy saw modest increases, while the newly-industrialized Asian economies of Hong Kong, Singapore, South Korea, and Taiwan posted a 9.7 percent increase in non-life premiums compared to 2006, according to the report.

For emerging markets, non-life premiums increased by 10.2 percent to $196 billion. Premiums increased by 9.6 percent in the Middle East and Central Asia, by 13.9 percent in South and East Asia, by 11.7 percent in Central and Eastern Europe and by 8.3 percent in Latin America and the Caribbean.

Daniel Staib, one of the study's authors, said in a statement, "Non-life insurance premiums are expected to fall in the industrialized economies. However, non-life premiums will continue to grow in the emerging economies, albeit at a slightly slower rate than in the recent past."

Mr. Staib added that the sub-prime crisis will have a limited impact on the industry, resulting in lower investment results. He said global inflation is a concern, as it will increase claims costs in liability insurance and other long-tail business lines in addition to hindering profitability.