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2020 insurance outlook
Insurers adapt to grow in a volatile economy
As insurance firms adapt to maturing markets and economic turbulence, in the long run, their ability to integrate technology, talent, and business-model innovation into legacy environments may be the key to success.
Where do insurers stand as they enter 2020?
THE insurance industry remains resilient, continuing to generate growth around the world and maintaining overall profitability despite turbulence in the global economy.
In the United States, the world’s biggest insurance market, the property and casualty (P&C) sector is building upon a strong 2018 in which the industry saw net income soar 66 percent to US$60 billion, thanks to a 10.8 percent boost in net premiums written and nearly breaking even on underwriting (after losing US$23.3 billion the year before). US insurer results deteriorated a bit but were still positive in the first half of 2019, with the industry posting an underwriting gain of US$5.4 billion (down from US$6.1 billion for the same period in 2018) and a profitable combined ratio of 97.3 (up from 96.2).
Globally, Lloyd’s, the world’s biggest insurance market entity, reported a profit (US$2.8 billion) for the first half of 2019 after two full years of losses. While 2019 consolidated figures for the global industry are not yet available, nonlife premiums were up 3 percent in real terms last year, above the 10-year average of around 2 percent, with close to 3 percent growth expected again for full year 2019 and 2020. However, growth is expected to be more robust in some developing regions. Nonlife premiums in advanced markets are only expected to rise 1.8 percent through 2020, compared to 7 percent in emerging markets—slightly down from the 10-year average due to concerns about China’s slowing economy and trade disputes with the United States.