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The global insurance market has witnessed a remarkable growth in the past four years with the value of insurance premiums soaring by 25 percent from $8 trillion in 2018 to over $9 trillion in 2024, a recent report by online stock analysis platform Stocklytics has revealed.
Dominating the insurance landscape, the United States has firmly cemented its position at the top of the global insurance market, contributing almost half of the world’s total insurance premiums, the report stated.
According to Statista, the U.S’ insurance market is projected to continue its rapid growth trajectory, with gross written premiums expected to surge by 11 percent from their current value of $4.65 trillion to an astounding $5.15 trillion by 2028. This astonishing growth forecast puts the US insurance market head and shoulders above both the European and Asian markets combined.
While the United States continues to lead the pack in global insurance spending, Statista forecasts that the Asian market is set to experience significant growth, with total insurance premiums expected to surge by 7.9 percent from their current value of $2 trillion to $2.2 trillion by 2028.
Meanwhile, the European insurance market is forecast to experience more moderate growth, with total insurance premiums projected to increase by 4.2 percent from their current level of $1.67 trillion to reach $1.73 trillion by 2028.
The report attributed the global insurance market’s impressive growth to several key factors, namely, economic growth, a burgeoning middle class, and the rise of InsurTech.
It noted that the flourishing economy and burgeoning middle class have expanded the consumer base for insurance products, while technological advancements in the form of InsurTech have made these products more accessible and affordable to consumers through digital platforms.
Furthermore, the report highlighted that the constantly shifting risk landscape has increased the demand for insurance coverage, contributing to the market’s impressive growth.
In a comprehensive analysis of the global insurance market’s growth trajectory, Stocklytics noted that from 2017 to 2020, the gross written premium in the market increased at a healthy pace from $7.24 trillion to nearly $8 trillion, as reported by Statista.
However, the COVID-19 pandemic dramatically accelerated this growth, with the market witnessing an unprecedented 8.6 percent surge in total insurance spending in 2021 alone, the highest recorded growth in a single year.
While the global insurance market experienced a temporary slowdown in growth after its peak year in 2021, the report emphasised that this slowdown was not indicative of the market’s long-term trajectory.
According to the report, the market is projected to set a new spending record in the coming years, with annual growth rates estimated to range between 2.5 and 3.5 percent. By 2024, global insurance spending is projected to climb to a record high of $9.09 trillion, continuing its upward trend towards an anticipated market size of $9.91 trillion by 2028.
The data forecast that the global insurance market will continue its impressive growth trajectory, reaching the landmark figure of $10 trillion by 2028, representing a 10 percent increase from its current size.
Diving deeper into the analysis, the report revealed that the non-life insurance segment is poised to be the driving force behind this market expansion, outstripping the growth of the life insurance sector and the overall market.
The report further revealed that, despite its impressive growth projections, the non-life insurance sector is expected to see an increase in its loss ratio from 45.3 percent to 46.4 percent over the next four years. This anticipated rise in the loss ratio, which measures the proportion of claims paid relative to premiums collected, is projected to result in a corresponding increase in the total value of gross claim payments from $2.46 trillion to $2.78 trillion.
In contrast, the life insurance sector is projected to experience a decline in its loss ratio, from 57 percent to 56 percent over the next four years. According to the report, this expected decrease in the loss ratio, coupled with the sector’s steady growth, will result in a slightly lower value of total insurance claim payments, reaching an estimated figure of $2.19 trillion by 2028.
