While Global premium growth resumed in 2012, European markets have contracted, Swiss Re's latest study on global life insurance has shown.
Global life insurance premiums increased by 2.3% in 2012 to USD 2 621 billion after contracting by 3.3% the previous year.
The reinsurer said while this increase is encouraging, growth remains below the average pre-crisis rate. Life premium volume increased 4.9% in emerging markets.
In advanced markets, growth was 1.8% (2011: 3%), largely supported by robust performance in advanced Asian markets and the US.
This came after a sharp decline in 2011 due to contractions in India and China following changes to regulations relating to insurance distribution. In advanced markets, growth was 1.8% (2011: 3%), largely supported by robust performance in advanced Asian markets and the US.
However, life insurance markets in Western Europe continued to shrink. Swiss Re said premium growth is likely to improve further in the near term.
China and India are expected to rebound in 2013. However, the weak economy in the Eurozone will remain a drag on insurance demand in the region.
Meanwhile, premium volume for non-life business increased by 2.6% in 2012 to USD 1 992 billion (2011: 1.9%). However, this is still less than the average pre-crisis growth rate.
In emerging markets, non-life premiums expanded by 8.6% in 2012 (2011: 8.1%). The recovery in the advanced markets gained momentum with growth picking up to 1.5% (2011: 0.9%), the fourth consecutive year of rising premiums following the decline in 2008.
Overall, profitability of life insurers remains subdued but non-life underwriting results improved modestly. Low interest rates continue to depress investment income, but are boosting reported accounting capital and solvency levels under GAAP.
Mahesh Puttaiah, one of the authors of the study said: "Premium growth expectations for the short-term remain below pre-crisis trends. In life, the expansion in emerging markets will likely accelerate as insurers in China and India adapt to the new regulatory environment, but the weakness in Western Europe will dampen developments in advanced markets.
"The non-life side is more positive since the sector will benefit from the strong economic performance of emerging markets and selective rate increases in advanced markets. However, rate increases will likely be moderate given the prevailing surplus capacity in the markets."
