“The long lean spell of the crisis years is finally behind us”, said Michael Heise, chief economist of Allianz SE. “In particular in Western Europe, many markets look back at a lost decade, in terms of premium income they are today smaller than before the crisis. However, we are not set for fireworks in the future either. In mature markets, insurance premium growth may trail behind economic activity for the time being. And there is a (sizeable) fly in the ointment for European insurers who do their accounts in euro: With a stronger euro, insurance premiums in other currencies lose value – this effect could shave a full percentage point off global growth per year.”
In the next ten years, not only overall growth will be stronger but also the balance between the segments life and p&c will shift again. Whereas the p&c segment was quite robust during the lean years, growing globally by 3.8 percent per year on average since 2008, the life segment clocked in a rate of only 2.8 percent. Again, the divergence was particularly pronounced in Western Europe: In fact, life premium income shrank (by 0.5 percent per year on average) over the period but p&c premiums grew by 1.2 percent. In Germany, life premiums continued to grow (by 1.5 percent per year) but p&c premium growth was considerably faster (1.8 percent per year). The reasons are fairly obvious: Besides stagnating incomes and high unemployment, first and foremost extremely low interest rates are to blame for subdued demand as classical savings products lost their appeal.