Canada’s insurance coverage market ranks eighth on the planet by complete premium quantity, based on a brand new examine from the Swiss Re Institute.
Complete premium volumes for Canada have been US$171 billion, up 2.8% from US$166 billion in 2022. Canada’s international market share in 2023 was 2.4%, according to 2022.
The Swiss Re Institute estimates the Canadian insurance coverage market’s complete premium pool shall be US$176 billion this yr and forecasts it to be US$185 billion in 2025.
America and China stay the primary and second largest insurance coverage markets on the planet, with complete premiums of US$3.2 trillion and US$724 billion, respectively.
Swiss Re’s annual World Insurance sigma report checked out each the property and casualty (non-life) and life insurance coverage sectors. It discovered the worldwide financial system has remained remarkably resilient, setting the scene for progress and improved profitability throughout the insurance coverage {industry}.
“The insurance coverage {industry} has reached a brand new equilibrium after the challenges of current years,” Jérôme Haegeli, Swiss Re’s group chief economist mentioned in a press release final week. “The worldwide financial system has shocked on the upside, which ought to drive extra demand for insurance coverage.
“The life sector specifically is one to look at as increased rates of interest drive funding earnings and client demand for annuities, giving extra folks safe retirement incomes.”
P&C outlook
On the P&C facet, profitability for non-life insurance coverage is predicted to enhance. Swiss Re Institute notes that because of inflation and the resulting rise in claims costs, non-life insurers have elevated charges over current years.
The institute expects to see increased costs persevering with for private traces in 2024, moderating in 2025.
For business traces, although nonetheless optimistic, fee will increase have decelerated, with some markets starting to soften. In Canada, Utilized Methods and Aon Canada just lately found business insurance coverage fee will increase in probably the most generally positioned traces of enterprise are trending downward.
“We count on business P&C carriers to keep up profitability in 2024, as fee developments have enabled traces like property to remain sustainably priced,” says Kera McDonald, chief underwriting officer at Swiss Re Company Options, within the launch. She provides business insurance coverage accounts for practically half of the overall P&C market.
“The {industry} has seen single-digit fee will increase for property enterprise written this yr,” McDonald says. “On the casualty facet, we observe a development of basic market softening throughout most long-tail traces.”
P&C insurers are anticipated to enhance profitability in 2024, with industry-wide return on fairness (ROE) throughout eight main markets at 10% to this point this yr, up from 6% in 2023. ROE of above 10% is forecast into 2025.
Canada’s P&C {industry} was properly above the worldwide common, with a 16.2% ROE in 2023 and a median ROE of 14.4% since 2020, the Property and Casualty Insurance coverage Compensation Company reported earlier this yr.
Main economies are proving extra resilient than anticipated, with international GDP progress forecast at 2.7% in actual phrases in 2024, the identical as final yr. This resilient progress is predicted to proceed into 2025 at 2.8% in actual phrases.
The development to international disinflation continues. “Nevertheless, returning to focus on inflation ranges is unlikely to be a clean journey,” Swiss Re warns.
Characteristic picture by iStock.com/Elif Bayraktar
