Global Insurance Industry
The world insurance industry (one of the most profitable financial services) expanded by more than 4.5% in 2010 to reach close to $4.1 trillion, according to research from MarketLine. The market is forecast to reach over $5.1 trillion in 2015, representing a 26% increase in five years. Life insurance represents the leading market segment with almost 58% of the overall market in terms of value. The EU represents just over 35% of the overall global insurance market.
Developed markets dominate the global insurance industry, with the US, the UK, Germany, France and Japan holding the largest combined share, reports Global Industry Analysts. The internet is occupying an increasingly important place as businesses interface in the insurance market, helping insurance institutions attract customers and cutting down on marketing and administrative spending as sales agents become unnecessary.
Key Market Segments
- The world life and health insurance market reached almost $2.9 trillion in 2010, reports MarketLine. The market grew at a yearly rate of close to 4.5% between 2006 and 2010, and is expected to grow at a yearly rate of more than 7% until 2015, hitting close to $4.1 trillion. Life insurance represented the leading market segment in 2010 at almost $2.56 trillion, or about 90% of the overall market.
- The world motor insurance industry expanded by almost 3.5% in 2010 to reach over $525 billion, reports MarketLine. The market is expected to be worth $614 billion in 2015, a 17% increase in five years. Personal insurance represents almost 80% of the overall market, and the Americas account for close to 45% of the global market.
- The world reinsurance industry was worth almost $166 billion in 2009, reports MarketLine. The market is expected to record yearly growth of almost 2.5% up until 2015. Property reinsurance represented the leading market segment in 2010, generating more than $66 billion, or almost 40% of the overall market in terms of value.
Regional Market Share
- Insurance industry growth in developed regions like North America is relatively slow due to an unsteady long-term savings market and ground lost to high-earnings oriented financial services, according to research from Global Industry Analysts. Japan’s insurance market is stronger largely due to financial reforms. Insurance companies continue to roll out their business activity in emerging Asian markets like China. Growth is expected to be strongest in the private and public pension plans market segment due to an aging global population.
- Asia Pacific is benefiting from rising interest rates, which are helping insurer investment returns, reports AM MindPower Solutions. However, inflation may become an obstacle to market growth.
- Africa’s insurance market has witnessed growing demand through bancassurance, reports AM MindPower Solutions. Other distribution channels, such as through brokers and agents, have not lost ground either. South Africa’s life insurance industry has well established distribution channels, and is supported by strong expertise and technological innovation.
- India’s insurance market is led by the health insurance segment, according to research from RNCOS. Strategies for market expansion being deployed by public and private insurers will help to expand the country’s insurance market. India’s health insurance segment is one of the world’s leading health insurance markets due to rising health awareness and healthcare costs. The segment is forecast to record yearly growth of almost 33% between 2010 and 2014. The government has set in place and sponsored health insurance schemes that are helping to fuel the market. Private and public health insurers are also offering a widening array of schemes from individual to family and covering prevalent conditions such as kidney failure, stroke and heart failure.
Insurance Industry Trends
The global insurance industry is likely to see its life insurance segment grow through innovation and improved processing methods, according to Global Industry Analysts. Consolidation will continue to benefit companies operating in the life insurance market by bolstering companies against competition from alternative long-term savings products.
Competition will increase as insurers seek to attract more customers through financial engineering, advanced investment and risk management practices. In addition, customers will demand greater flexibility and portability, seeking options allowing them to switch from one insurer to another without losing their no-claims benefit.
Leading Industry Associations
- Association of British Insurers
- American Insurance Association
- Insurance Brokers Association of Canada
- American Risk and Insurance Association
- National Association of Insurance Commissioners
- General Insurance Association of Singapore
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