The global non-life insurance market has experienced strong growth in recent years, registering a compound annual growth rate (“CAGR”) of 5.4 percent between 2011 and 2015 to reach a value of $2.03 trillion, according to data from research company MarketLine.
The company reported that market values have increased in all regions. Global growth, however, was primarily driven by healthy revenue increases in the United States and China, both ranking in the top three markets globally.
According to MarketLine, as the single largest market globally accounting for almost 40 percent of all revenue, the performance of the United States always will have a huge bearing on the insurance space as a whole and healthy growth, coupled with the rapid expansion of the increasingly influential Chinese market, has spurred growth rates in recent years.
Nicholas Wyatt, analyst for MarketLine, explained, “Motor insurance is the biggest segment of the Chinese non-life insurance market, accounting for over 57 percent of its value. That segment has seen rapid growth year after year since third party cover became a legal requirement in 2006. An increase in the number of cars on the road, along with some drivers opting for more expensive, comprehensive cover, has created a boom that shows no signs of stopping.
“In the U.S., property insurance is on the up thanks to destructive weather phenomena, particularly in Florida, which accounts for approximately 14 percent of all U.S. insured catastrophe losses.” He added that the value of property insurance “is growing due to the uncertainty caused by such weather conditions.”
The global market is forecast to grow at a CAGR of 5.9 percent between 2015 and 2020 to reach a value of $2.71 trillion and Mr. Wyatt said that there was great scope for growth beyond that. “Motor insurance is comfortably the market's largest segment and there are a still a number of sizeable, largely untapped markets,” he said.
“In countries such as Indonesia and South Africa, car insurance is not a legal requirement and there is a chance that such jurisdictions could bring their legislation into line with that of other nations. This could serve as a catalyst for further market growth.”
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].