Global growth in life insurance premiums has continued to grow during 2016 but slowed compared to the previous year due to slower growth in advanced and developing economies, according to a report from reinsurer, Swiss Re.
In its latest sigma report, Swiss Re stated the increase in global life insurance premiums was 2.5%, slower than 2015 which recorded 4.1% growth, with global premiums totalling US$2.617 billion.
The lower growth rate was due to a 0.5% contraction in life premiums in advanced (developed) markets, however, this was offset by growth of 17% in emerging markets even though global economic growth, a key driver of insurance demand according to Swiss Re, was just 2.5%
The report stated that much of the growth in emerging markets, which was more than twice the 10 year average of 8.4% growth, took place in China and was the result of further liberalisation of interest rates and government efforts to encourage growth of protection products.
…traditional intermediaries still dominate distribution across the globe and accounted for 60-70% of premiums in most markets…
China had also moved from the 16th largest insurance market in 2000 to the third largest in 2016 with US$466 billion in total premiums, only slightly behind the second largest market of Japan (US$471 billion), but still trailing the US market (US$1.35 trillion).
Swiss Re also stated that while direct digital distribution channels were increasing in all markets traditional intermediaries still dominate distribution across the globe and accounted for 60-70% of premiums in most markets.
“Their role in the sale of life insurance remains especially important, probably reflecting the more complex nature of many of these products and the value prospective policyholders attach to intermediaries’ advice,” the report stated.
