• Global insurance premiums expected to grow by 3.4% in real terms in 2021, after contracting an estimated 1.4% in 2020
• China will lead recovery with premiums up by an estimated 10% in non-life next year, and by 8.5% in life
• Insurance recovery supported by heightened risk awareness driving demand and continued strong rate hardening
• Amid uncertainty of how the COVID-19 crisis will evolve, and the risk of trade war and a credit crisis, public policy should focus on sustainable infrastructure development and inclusive growth
World gross domestic product (GDP) is expected to contract by 4.1% this year in what is so far the deepest recession of our lifetimes. The latest sigma study, “Rebuilding better: global economic and insurance market outlook 2021/22“, predicts that recovery will be slow and uneven in 2021. Global GDP is forecast to grow by 4.7% in 2021 in real terms, below the market expectation of 5.2% growth. In this context, the sigma study finds that, amid the economic shock inflicted by COVID-19, global insurance markets have been less severely impacted than expected in the Swiss Re Institute June 2020 forecast. Total premium volumes in 2020 are estimated to decline by 1.4% in real terms, less than the earlier anticipated 2.8% drop. Premium growth is forecast to recover swiftly to 3.4% and 3.3% in 2021 and 2022 respectively, supported by continued rate hardening.
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