sigma 3/2021 - World insurance: the recovery gains pace

Swift vaccine deployment and large-scale fiscal stimulus, including unprecedented direct transfers to households and businesses, are fueling a stronger economic bounce-back than we projected last year. We lift our global growth forecast to a historically high 5.8% in 2021. Insurance demand is benefitting from the growth momentum, and we forecast above-trend global premium growth of 3.3% in 2021 and 3.9% in 2022.

Rising risk awareness and the strongest rate hardening for 20 years in non-life insurance commercial lines will push total premium volumes 10% higher than pre COVID-19-crisis levels this year. By the end of 2022, we forecast that total global premium volumes will surpass USD 7 trillion for the first time ever.

The recovery may be uneven worldwide, as much still depends on the ability of vaccines to keep the pandemic under control. Rising inflation is also a key medium-term risk, particularly for non-life insurers.

However, on balance we have a positive outlook. The pandemic has cemented paradigm shifts that support the long-term outlook. In addition to rising risk awareness, which is proving a strong demand driver for both consumers and companies, a second shift is the acceleration in demand to transact online. It is imperative that insurers offer digital engagement at all touchpoints as they compete with new, non-traditional players entering insurance markets.