Swiss Re Predicts Robust Economic Growth To Fuel Insurance Sector

Swiss Re Institute's latest World Insurance sigma report forecasts resilient global economic growth, predicting a 2.7 percent rise in gross domestic product (GDP) for 2024. This stability is set to drive growth and profitability in the insurance industry, despite ongoing geopolitical tensions and inflationary pressures.

Jérôme Haegeli, Swiss Re's group chief economist, said the insurance sector has reached equilibrium after recent challenges and the global economy has exceeded expectations, likely increasing the demand for insurance.

The report projects global GDP growth to remain steady at 2.7 percent in 2024 and increase to 2.8 percent in 2025. Regional growth will vary, with the United States forecast to grow at 2.5 percent, while the Euro area lags at 0.7 percent.

Non-life insurers have been raising rates due to inflation and rising claims costs, a trend expected to continue into 2024. Swiss Re Institute forecasts non-life premium volume to grow from $4.6 trillion in 2024 to $4.8 trillion in 2025.

Kera McDonald, chief underwriting officer at Swiss Re Corporate Solutions, said the commercial property and casualty market will maintain profitability, with single-digit rate increases for property insurance and a softening trend in casualty lines.