Recent years have seen strong growth in the global non-life insurance market, registering a compound annual growth rate (CAGR) of 5.4 percent between 2011 and 2015 to reach a value of $2.03 trillion, according to the latest report by research company MarketLine.
The report claims that market values have increased in all regions. However, global growth is primarily driven by healthy revenue increases in the US and China, both ranking in the top three markets globally.
It also points out that the performance of the US, as the single largest market globally accounting for almost 40 percent of all revenue, will always have a huge bearing on the insurance space as a whole and healthy growth. When coupled with the rapid expansion of the increasingly influential Chinese market, this has spurred growth rates in recent years.
Nicholas Wyatt, analyst for MarketLine, said: “Motor insurance is the biggest segment of the Chinese non-life insurance market, accounting for over 57 percent of its value. That segment has seen rapid growth year after year since third party cover became a legal requirement in 2006. An increase in the number of cars on the road, along with some drivers opting for more expensive, comprehensive cover, has created a boom that shows no signs of stopping.
“In the US, property insurance is on the up thanks to destructive weather phenomena, particularly in Florida, which accounts for approximately 14 percent of all US insured catastrophe losses. In 2016, between 12 and 17 named storms were anticipated across the country with around eight forecast to form hurricanes. The value of property insurance is growing due to the uncertainty caused by such weather conditions.”
The global market is forecast to grow at a CAGR of 5.9 percent between 2015 and 2020 to reach a value of $2.71 trillion and Wyatt believes there is great scope for growth beyond that: “Motor insurance is comfortably the market's largest segment and there are a still a number of sizeable, largely untapped markets.
“In countries such as Indonesia and South Africa, car insurance is not a legal requirement and there is a chance that such jurisdictions could bring their legislation into line with that of other nations. This could serve as a catalyst for further market growth.”
MarketLine, Non-life, Nicholas Wyatt, Global