Life remains the largest segment of insurance
By Ryan Smith
Total insurance premium income worldwide amounted to nearly €5.6 trillion (about $6.05 trillion) last year, according to a new report by Allianz Trade.
Life remains the largest insurance segment at €2.6 trillion, followed by property-casualty (€1.8 trillion) and health (€1.1 trillion). The premium pool grew by 4.9%, or €259 billion, amid a global inflation rate of 8.6%, Allianz Trade said.
The three areas are very different when it comes to growth. While P&C grew at a robust 8.7%, health grew at a more modest 4.9%. The life insurance market grew by only 2.4% as households felt the pressure of inflation on their incomes.
The increase in P&C premiums was driven by all regions of the world. However, more than half (€77.5 billion) of last year’s global growth came from North America alone. With premium income of €860 billion, North America remains the world’s largest market by a significant margin, Allianz Trade said.
Asia also saw significant growth of 8.4% (€31 billion) last year. With total premium income of nearly €403 billion, Asia surpassed Europe for the first time last year.
Problems in the life insurance sector
While P&C enjoyed strong growth, the life insurance market was hit last year, especially in Western Europe, where premium income fell by almost 3% (€22 billion) to €740 billion in 2022.
Growth in the sector was also disappointing in Asia, with an increase of only 3% (€33 billion) to €925 billion.
As in the P&C sector, North America was the main growth driver for the life insurance segment last year, adding €61 billion in new premiums – a growth of 7.8% to €840 billion. North American dominance is more pronounced in the health sector, where the US accounts for about two-thirds of global premium income.
Domination in North America
North America – and particularly the US, which accounts for 94% of the region’s premium pool – has dominated the world insurance market for the past decade, reported Allianz Trade.
More than half of the increase in global premium income in P&C and health was generated in North America. In the life segment, the North American share is just under a third, with Asia dominating that market.
As a result, the global share of the region increased from 39.6% in 2012 to 43.9% in 2022, Allianz Trade reported.
That’s in direct contrast to Western Europe, which fell more than six percentage points to 23.8%.
Japan fell 3.7 percentage points to 5.5%, while China nearly doubled its global share to 11.4%.
Inflation continues to bite
Navigating the inflationary environment will be the industry’s biggest economic challenge in the coming years, Allianz Trade reported.
However, premiums are forecast to increase by a further 5.2% over the next decade, adding €4,190 billion to the global premium pool. By 2033, premium income is expected to hit €4.3 trillion in life, €3.1 trillion in P&C and €2.3 trillion in health.
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