By The Nation
Compared to 2016, the nominal increase adjusted for exchange rates was 3.7 per cent.
Property-casualty insurance set the tone last year. With a growth rate of 5 per cent, it grew almost twice as fast as life insurance (2.8 per cent), but also recorded the largest increase since 2012. Nevertheless, the growth discrepancy between the regions remains striking.
While premiums in Western Europe, for example, rose by a meagre 2 per cent, Asia (excluding Japan) soared by 10.2 per cent.
The top global performer last year was India, with bumper growth of above 30 per cent.
Asia, excluding Japan, also had another strong year in life, with premiums surging by almost 14 per cent in 2017.
Since the financial crisis, insurance premiums in the region have more than tripled.
With approximately €60 billion in additional premiums in life worldwide, around 80 per cent were attributable to the Chinese market.
Thailand showed robust growth of 6.6 per cent in 2017 and is now the seventh largest life market in the region, ahead of much bigger Indonesia.
In both lines combined, last year's global premium growth totalled just under €130 billion.
Asia, excluding Japan, accounted for 76 per cent of the increase, with China accounting for more than two thirds of this.
"Asia is setting the pace for insurance markets, in particular in life," said Michael Heise, chief economist of Allianz. "The past development is nothing less than amazing. This is part of a broader trend. The region succeeded in transforming high growth rates into mass wealth.
"The new Asian middle class is now not only driving insurance markets, but many consumer markets. Asian savers and shoppers are the growth engine for the world economy,” Heise said.
Allianz Research expects insurance markets to continue to recover, with premium growth forecast to reach around 6 per cent in the next decade.
This upturn primarily reflects the return of the global economy to normal growth and inflation rates.
Growth expectations for Asia, excluding Japan, are notably higher. The region should achieve growth of almost 11 per cent per annum over the next decade. At the end of the 2020s, around 40 per cent of global premium income should be written in the region.
Ten years ago, this figure was around 10 per cent and China is due to overtake the US as the largest insurance market.
“Global insurance markets are undergoing fundamental changes," said Kathrin Brandmeir, economist at Allianz Research. "However, from our point of view, this disruption also offers great opportunities.
"With the new technologies, insurance cover can be made accessible and tangible for more people, and insurance products can become more attractive."
Brandmeir said: "If we succeed in getting customers so enthusiastic about insurance that they would again spend as much of their income on insurance cover as before the crisis, global premiums could be about €1 trillion higher at the end of the next decade than in our baseline scenario.”