New Zealand and Australia have witnessed an increase in their insurance premiums which is well above the global average in 2011, reported global reinsurer Swiss Re.
Despite a decrease in profitability, both countries noted an increase of 2.2% in life insurance premiums in the face of international premium decrease of 2.7%. A 3.7% expansion in non-life insurance was reported in New Zealand to US$ 8.5bn, while in Australia premiums on non-life insurance rose to 9% and a staggering US$ 45bn. The global average remains at 1.9%.
Chief economist at Swiss Re, Kurt Karl, said: “Growth of Australian and New Zealand life insurance markets should remain stable in the near future as the economies steadily recover from natural disasters. Rising disaster awareness, the higher expected frequency of catastrophic events and increased risk management preparedness measures are putting upward pressure on premium and reinsurance rates.”
Dr Karl predicted a moderate overall growth in 2012 and stated that recent mergers in Australia and New Zealand would contribute to strengthening and stabilising their markets.
In another report by Swiss Re, premiums paid by the world’s insured individuals fell by almost 1%, with Western Europe, China and India noticing an especially “sharp” fall. In contrast, the US noticed their growth resume. Swiss Re noted “the unfolding recession in Europe and the weak economy in the US dampened demand for insurance cover”.
The reinsurer predicts that there will continue to be a moderate expansion in non-life premiums in advanced markets while emerging markets will notice a revival of life insurance premium growth.