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Report: Expected growth of 3.6% in global insurance premiums in 2021 and 2022



A report unveiled by the Egyptian Insurance Federation in its weekly bulletin expected a growth of 3.6% in global insurance premiums in 2021 and 2022, supported by increased economic strength (although production will not return to pre-pandemic times), and the market will be tighter in insurance Trade to a degree not seen since 2002-2003, with an economic recovery expected in most emerging regions.

 

There are some factors that will impede the achievement of growth, for example, commercial insurance lines represent a quarter of total property insurance premiums globally, and an incomplete economic recovery is likely to put some restrictions on demand from the business sector, and at the same time, the insurance business will witness Individual is increasing competition especially in sectors that have benefited from lower claims during the lockdown, such as auto or individual healthcare insurance.

 

The report added that the losses of natural disasters that occurred in 2020 are among the factors that contributed to the tightening of the market, as the insured losses are estimated to date at about $ 19 billion, but the total number of insured losses will take more time to fully assess them, as one of the effects of the crisis was COVID-19 is the slowdown in claims processing.

 

The results of the underwriting are expected to remain stable or to witness some improvement. It is likely that the underwriting results of individual insurance will improve, but there may be some decline in the underwriting results of commercial insurance.

 

Despite this, it is difficult at present to forecast profitability levels, as it is likely that there will be more losses associated with Covid 19, not only in personal accidents but throughout the market as a result of re-imposition of additional government restrictions or even complete closures. .

 

The increased competition could put pressure on prices in relation to the individual insurances which took advantage of unexpected gains due to reduced frequency of claims during the close. On the other hand, the current difficult market in commercial lines is expected to continue until 2021. In general, any improvement in profitability at the level of the insurance sector will depend on the strong performance of the underwriting.

 

Returns on investment are set to remain low for a longer period, and with higher corporate bankruptcies, credit losses on invested assets could undermine final profits, and an improvement in underwriting results is expected if there is an adequate return on capital.

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