Swiss Re Foresees Rising Premiums Amid Increasing Global Risks
Swiss Re Foresees Rising Premiums Amid Increasing Global Risks
1
In a comprehensive analysis, Swiss Re Institute predicts that global property and casualty insurance premiums will rise in tandem with GDP over the upcoming decade.
This growth is driven by amplified natural catastrophe losses, asset accumulation, and heightened economic and litigation claims inflation.
The institute's report outlines the evolving insurance landscape amid increasing global risks.
The report anticipates reduced market concentration with heightened competition. It highlights an emerging trend where brokers and managing general agents are becoming more integral in distribution and underwriting processes. By leveraging these entities, insurers can access specialised skills and scale efficiently.
The global property and casualty market has experienced significant expansion, doubling over the past two decades to reach a value of $US2.4 trillion ($3.6 trillion). With ongoing innovation expanding coverage access through both traditional and alternative methods, projections indicate that the market could grow to $US4.3 trillion ($6.5 trillion) by 2040.
Furthermore, captive insurers are estimated to control $US60-$US80 billion ($91-$122 billion) in global premiums. These entities enable corporations to self-insure frequent risks while utilising reinsurance for major exposures. Meanwhile, insurance pools and mechanisms like US fair access programs and wind pools are increasingly addressing market volatility by ensuring availability where traditional options may be limited.
Swiss Re's Group Chief Economist, Jerome Jean Haegeli, notes that pricing, risk management, and transformation have become more efficient within the insurance sector. This efficiency supports capacity even as uncertainties rise, with insurers increasingly shifting risk burdens to reinsurers. This trend reflects growing demands for risk transfer amid an evolving risk landscape.
The report, titled "Growing Stronger: How the Property and Casualty Market Adapts to a Riskier World," highlights a marked 7% compound annual growth rate in reinsurance premiums over the past decade, outpacing the 4.2% rate in primary property and casualty insurance.
Swiss Re's findings were shared during the Reinsurance Rendezvous in Monte Carlo, providing a backdrop for industry stakeholders assessing and adapting to the complexities of a riskier global environment.
The recent cyberattack on Fortnum Private Wealth, accompanied by ASIC's legal action, has spotlighted the critical risks cyber threats pose to financial advice companies in Australia. With digital integration intensifying across the finance sector, the owner of Fortnum, Entireti, plans to defend the case, underscoring the necessity for ongoing vigilance in cybersecurity measures. - read more
In a comprehensive analysis, Swiss Re Institute predicts that global property and casualty insurance premiums will rise in tandem with GDP over the upcoming decade. This growth is driven by amplified natural catastrophe losses, asset accumulation, and heightened economic and litigation claims inflation. The institute's report outlines the evolving insurance landscape amid increasing global risks. - read more
In response to the devastating floods that swept across New South Wales' Mid North Coast in May, the Insurance Council of Australia (ICA) is taking proactive steps to support the affected residents. Insurers, organised by the ICA, will be meeting with flood victims in Kempsey, Taree, and Port Macquarie to provide guidance and support as they navigate their insurance claims. - read more
A motor insurance policyholder has won a significant dispute over fraud allegations, with the industry ombudsman ruling in favour of a payout following a controversial car accident claim. The case revolved around an incident where the claimant's wife crashed at an intersection one evening, reportedly failing to yield. The lack of photographic evidence due to shock and subsequent involvement of towing services complicated matters. - read more
In a strategic move set to bolster its market position, NM Insurance has announced a five-year agreement with capacity provider Zurich, positioning itself for further growth and increased broker confidence in its success. Since its establishment two decades ago as Nautilus Marine Insurance Agency, NM Insurance has expanded its focus beyond the recreational boat market in Australia, branching into New Zealand and diversifying into the commercial marine, caravan, and motorcycle sectors. - read more
Tradespeople work hard to earn their income, often facing unique expenses that can impact their bottom line. Understanding and maximizing tax deductions is crucial for minimizing these costs and keeping more of what they earn. By making informed decisions about expenses, tradespeople can significantly reduce their taxable income. - read more
Professional indemnity insurance (PI insurance) is a type of coverage designed to protect businesses and individuals who provide professional advice or services. It covers claims made against them for negligent acts, errors, or omissions in the performance of their professional duties. - read more
Trades insurance is a type of coverage specifically designed to protect those who work in various trades, such as electricians, plumbers, carpenters, and builders. It encompasses a range of insurance products tailored to address the unique risks and challenges faced by tradespeople in their day-to-day activities. - read more
Insurance is a crucial safeguard for everyone, but for subcontractors, it's essential. In the world of trade professionals, the tools of the trade are more than just pieces of equipment; they are investments into one's livelihood. - read more
Knowledgebase
Aggregate Limit: The maximum amount an insurer will pay for all covered losses during a policy period.
