Life Products Look Great in the 'Emerging Markets': Swiss Re

Swiss Re institute analysts say they think property-casualty insurance premium revenue mostly moves up and down with the health of the overall economy.

In the life sector, tax rules, other regulations and shifts in distribution strategies tend to have a bigger effect, the analysts write.

In the life sector, in the United States and other emerged markets, low interest rates and changes in financial strength regulations have made guaranteed savings products, such as annuities, less attractive both for consumers and for insurers, the analysts say.

Protecting people against the risk of death, rather than against swings in investment earnings, has been performing better than the savings product business but generates much less premium revenue, the analysts say.

In the emerged markets, "unless life insurers find new ways to profitably offer attractive life insurance savings products, the downturn of the life market could continue for some time," the analysts warn.

Meanwhile, in emerging markets such as China and Indonesia, relatively low life insurance ownership rates have helped allow for high revenue growth rates, the analysts say.

"In the case of China, the development of insurance markets is strongly supported by government policies," analysts add.

The analysts note, however, that life sales were weak in 2017 in some emerging markets.

In Mexico, for example, new financial strength requirements similar to those adopted in Europe led to a life sector slowdown.

A drop in interest rates hurt life revenue in Brazil.

— Read North America's Share of Global Premiums to Decline  on ThinkAdvisor.

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