03-07-2020
Insurer forecasts muted demand in 2020
Insurance AlertssInsurer forecasts muted demand in 2020
With the coronavirus hitting the global economy, the sudden stop of economic activity around the world is expected to reduce global premium income by 3.8% this year according to Allianz's recent 'Global Insurance Report'.
It is likely that the life insurance sector will be affected more than the P&C business with growth rates of -4.4% and -2.9% respectively.
Therefore, the report said that the impact of the COVID-19 pandemic is going to be three times stronger than that of the global financial crisis when global premium income decreased by 1%.
Compared to the pre-pandemic growth trend, the current economic crisis is expected shave around EUR360bn ($405bn) from the global premium pool - EUR 250bn for life insurance and EUR 110bn for P&C.
“2020 is lost to the virus, no doubt about it. More interesting is the question about what comes after COVID-19,” said Allianz chief economist Ludovic Subran.
He pointed out three trends, already in place before, which will gather steam in the coming years –digitalisation of the business model, the pivot to Asia and the growing significance of ESG-factors.
The rise of Asia
“While Asian players lead in technology, European peers are ahead with ESG. But dominance of the global insurance industry will be decided in Asia – Asian households emerge as the consumer of last resort, driving global insurance demand,” he said.
Source: Asia Insurance Review
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