Worldwide, the value of commercial non-life (P&C) insurance premiums in 2014 was US$728.6 billion, with global market size having risen at a nominal compound annual growth rate of 5.1 per cent since 2010, when premiums were worth $596.3 billion. These are among the findings from a research study recently released by Finaccord
According to the report, titled Global Commercial Non-Life Insurance: Size, Segmentation and Forecast for the Worldwide Market, in 2014, the worldwide market value broke down between $210.3 billion (28.9 per cent of the total) in commercial motor insurance premiums (the largest single segment of the global market) and $518.3 billion in premiums for all other types of commercial non-life insurance including, most notably, commercial liability and property cover.
“At a respective $266.0 billion, $63.1 billion and $33.7 billion in gross written premiums, the US, China and Germany were the world’s largest commercial lines markets in 2014,” commented David Parry, managing consultant at Finaccord. “Meanwhile, in nominal terms, and across the 40 major markets analysed in depth by Finaccord, the markets that grew most rapidly between 2010 and 2014 were those of Argentina, Turkey and Thailand, with compound annual growth rates of 34.6 per cent, 18.3 per cent and 16.0 per cent, respectively. However, once national inflation rates have been accounted for, the fastest-growing markets were those of Thailand, Turkey and the Philippines with respective real compound annual growth rates of 13.7 per cent, 10.0 per cent and 9.5 per cent.”
A further significant finding of the study is that the composition of commercial non-life insurance markets between different lines of business varies substantially between different countries. In 2014, commercial motor insurance premiums accounted for the highest proportion of the total national commercial lines market in China at 58.8 per cent, while commercial liability and commercial property premiums peaked in Australia (57.1 per cent) and Sweden (44.6 per cent). As for commercial MAT insurance, this represented the highest proportion of the total national commercial lines market in Norway (33.8 per cent).
“The composition of commercial non-life insurance by country is shaped by the maturity of each market, by industrial specialisms and by national regulations,” Parry continued. “For example, the MAT sector in Norway includes energy insurance, and since the shipping and energy sectors are both very important parts of the country’s economy, this makes the MAT insurance line unusually large. In Australia, over half of the commercial liability sector is made up of workers' accident insurance; most of these premiums are paid to public sector insurance schemes albeit these are often administered by private sector insurers.”
Looking ahead, Finaccord’s research indicates that the global commercial non-life insurance market is likely to increase at slightly faster nominal and real compound annual growth rates between 2014 and 2018 than it did between 2010 and 2014, reaching a value of around $895.1 billion by 2018, which converts to $824.5 billion when deflated in line with forecast inflation rates. “Worldwide, we expect commercial liability insurance premiums to increase at more than three times the rate of commercial motor, commercial property and commercial MAT premiums through to 2018,” concluded David Parry. “This will essentially be a result of liability insurance growth in the US, which constitutes more than half of the global commercial liability insurance market. While the commercial motor and property insurance markets are stable in the US, liability premiums continue to grow strongly, especially for workers' accident insurance.”