Premium growth returns in 2014, profitability down: Swiss Re

Global insurance premiums returned to growth in 2014, as the insurance and reinsurance industry continued to recover from the economic crisis, with premiums increasing by 3.7 percent to USD4778 billion.
Advanced markets saw premium growth of 2.9 percent, which remains below the pre-crisis growth rate of 3.4 percent. Emerging market premium growth was faster at 7.4 percent in 2014.

In fact, Swiss Re’s latest sigma report highlights that while premiums may have been growing, the profitability of the business underwritten is declining.

Profitability of the global insurance sector has been weak since 2008, Swiss Re notes, due to the investment climate and negative underwriting results from 2008 to 2012. Following that there was some rate hardening, which improved the situation a little, but after 2014 that has ceased.

Underwriting profitability across eight major insurance and reinsurance markets worsened as the combined ratio rose to 98.1 percent in 2014 from 97.5 percent in 2013, Swiss Re notes.