Continued global growth
2017 was a year of continued global growth amid large natural catastrophes
Five macro trends that are driving our market
Over the course of the year, Swiss Re monitored five major economic and insurance market trends.
Improving global growth
The cyclical upswing in the major economies continued at an accelerated pace.
3.2%
(Growth of real global GDP, 2017, source: Swiss Re Institute)
Low bond yields
While the US Fed increased rates three times in 2017, 10-year government bond yields remained low.
2.4%
(10-year US government bond yield, year-end 2017, source: Bloomberg)
Large catastrophic losses
2017 was one of the costliest natural catastrophe years for the re/insurance industry.
USD 133bn
(Estimated insured natural catastrophe losses, 2017, source: Swiss Re Institute)
Elevated policy uncertainty
Uncertainty around global economic policies decreased during the course of 2017, but remained elevated.
180
(Global Economic Policy Uncertainty Index, average 2017, average 1997–2015 = 100, source: www.policyuncertainty.com)
InsurTech gaining traction
The number of investments in InsurTech start-ups continued its rise in 2017.
203
(Number of investments in InsurTech, first nine months of 2017, source: CB Insights)
Trends in our four main markets
Primary non-life
Premiums have risen moderately in almost all countries/regions in 2017 due to stronger economic growth. Global non-life premiums are up an estimated 3% in real terms, after a 2.3% rise in 2016. Underwriting conditions have remained soft, particularly in commercial insurance.
2 200 (USD billions)
Estimated global premium income in 2017
3%
Estimated global premium growth in 2017
Reinsurance non-life
Global premiums in non-life reinsurance are estimated to have grown by 3% in 2017 in real terms, based on rapidly increasing cessions from emerging markets. After five quiet years with low natural catastrophe losses, the global non-life reinsurance industry is facing heavy losses from the hurricane season in the US and the Caribbean in 2017. The combined ratio for 2017 is estimated to be around 110%, with most of the increase due to the hurricane losses, and also a number of other events including Cyclone Debbie in Australia, earthquakes in Mexico, and wildfires in California and Southern Europe.
170 (USD billions)
Estimated global premium income in 2017
3%
Estimated global premium growth in 2017
Primary life
Global primary life insurance premiums are estimated to have risen by about 3% in 2017 in real terms, up from 2% in 2016. Emerging markets, in particular China, account for most of the recent acceleration. Life premiums growth in advanced markets was flat, which is at least an improvement from the 2% decline in 2016.
2 800 (USD billions)
Estimated global premium income in 2017
3%
Estimated global premium growth in 2017
Reinsurance life & health
The life reinsurance industry registered a 4% premium increase in 2017. Underlying reinsurance premium growth in the traditional reinsurance area, such as mortality and morbidity risk, has remained relatively subdued this year. Premiums are estimated to have grown by 1% in real terms in 2017. In mature markets, slight contractions in the US and UK were set off by positive developments in Canada, Japan, Australia and Continental Europe. In the emerging markets, premiums grew by 11%, driven largely by China, with other emerging markets seeing more modest growth.
70 (USD billions)
Estimated global premium income in 2017
4%
Estimated global premium growth in 2017