The global insurance industry is experiencing unprecedented growth, with projections showing a 7.8% increase in 2023 — the fastest since 2006, before the financial crisis. This surge is highlighted in the recent Allianz report, “The Global Insurance Report,” which reveals that global insurance companies collected a total premium of €6.3 trillion in 2023. This includes €2.62 trillion for life insurance, €2.15 trillion for general insurance, and €1.43 trillion for health insurance.
Despite this growth, rising inflation is dampening the purchasing power of many insurance policies. While premiums have risen, they haven’t kept pace with inflation, creating challenges for both insurers and policyholders.
A Balanced Growth Across Insurance Sectors
Unlike 2022, where specific insurance segments led premium growth, 2023 shows a more balanced trend across life, general, and health insurance sectors. Life insurance grew by 8.4%, general insurance by 7.0%, and health insurance by 6.6%. The life insurance sector saw a major boost, especially from Asia (excluding Japan), which grew by an astounding 16.2%, now surpassing Western Europe as the largest life insurance market globally.
North America remains the largest general insurance market, with a global share of 54.2%, and premiums increasing by 7.1%. In Asia (excluding Japan), general insurance premiums rose by 6.6%, maintaining a regional share of 15.5%.
Future Outlook: Steady Growth on the Horizon
Over the next decade, the global insurance market is expected to grow at a steady annual rate of 5.5%, in line with global GDP growth. General insurance is expected to grow at 4.7% annually, while health insurance will grow at a robust 7.3% per year. The life insurance segment is set to benefit from higher interest rates, with annual growth projected at 5.1%.
By 2034, global premium pools are expected to expand by nearly €5 trillion, with life insurance accounting for €1.887 trillion of that growth. Asia (excluding Japan) is expected to drive much of this growth, contributing €928 billion, outpacing North America (€377 billion) and Europe (€323 billion) combined.
India is forecasted to be the fastest-growing insurance market in the region, with projected growth of 13.6% annually, while China will continue to dominate in absolute terms with a growth rate of 7.7% per year.
Challenges Ahead: Staying Relevant in a Changing World
Despite the positive outlook, the insurance industry must not become complacent. According to Arne Holzhausen, one of the authors of Allianz’s report, the industry faces increasing challenges as economic inequalities grow and societal polarization deepens.
“The biggest challenge for the industry is to maintain its relevance against increasingly intervening conditions. Rising inequality and polarization threaten the social fabric. The industry’s primary task will be to navigate these challenges while maintaining its role as a force for equality and unity in the years ahead,” Holzhausen noted.
