By Alwyn Scott
NEW YORK (Reuters) - The global insurance industry is poised to recover more quickly and forcefully from the pandemic than it did after the 2008 financial crisis, despite such obstacles as low interest rates and inflation risk, insurer Swiss Re AG's chief Americas economist said on Friday.
Unlike the prior crisis, the pandemic did not weaken insurers' overall capitalization or financial strength, which allows companies to write new coverage and increase revenue, economist Thomas Holzheu told Reuters.
Writing new policies was more difficult in 2009 and 2010 when insurers were reeling from capital losses, slow economic growth and depleted incomes of companies and individuals.
In contrast, businesses and individuals now have more money from government stimulus and support programs, and are more conscious of the need to buy protection against risks, he added.
"We see a much stronger, more resilient demand for insurance - last year, this year, and we expect for the next few years - compared with the financial crisis, when the industry was a part of the financial markets issues," he said.
Swiss Re's view aligns with other bullish signs. Global commercial insurance prices, for example, rose 18% in the first quarter of 2021 from a year earlier, on average, insurance broker Marsh McLennan Cos Inc said in May. Rates have risen since late 2017.
Swiss Re said it expects annual growth for all premiums, not just commercial, to reach 3.3% this year and 3.9% in 2022, after falling just 1.3% last year. That compares with a 3.7% decline in 2008, during the financial crisis, and a slower rebound of 0.5% and 2.1% in 2009 and 2010, respectively.
Sector bellwether Travelers Companies Inc on Tuesday beat second-quarter Wall Street estimates by more than $1.00 a share.
Other large U.S. insurers are due to report results over the next two weeks.
(Reporting by Alwyn Scott in New York; Editing by Matthew Lewis)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU