Global insurance premium reached record $4.9trn in 2013, according to Aon Benfield risk study

MONTE CARLO, Monaco, Sept. 14, 2014 /PRNewswire/ -- Aon Benfield, the global reinsurance intermediary and capital advisor of Aon plc (NYSE:AON), today releases its annual Insurance Risk Study, which provides a comprehensive review of insurers' growth, risk and profitability, as well as highlighting emerging risks and opportunities in the global insurance industry. 

The 9th edition of the study, entitled Growth, profitability, and opportunity, reveals that the property and casualty (P&C) industry achieved a global underwriting profit last year, helped by relatively light catastrophe losses in comparison with 2011 and 2012.  Combined ratios varied significantly by country, and the study reveals many profitable areas of growth in the global insurance market.  The Insurance Risk Study continues to be the only public source to publish global statistics on insurance profitability by country, to the best of our knowledge.

For P&C business, the average insurer combined ratio for 2013 across the top 50 global markets was 99.1 percent, with 21 markets achieving a combined ratio below 95 percent, and 10 markets achieving a combined ratio below 90 percent.

The study highlights that global insurance and reinsurance premium reached a record USD4.9trn in 2013 – a 0.9 percent increase over 2012 – driven primarily by growth in the P&C and health insurance segments. Global insurance and reinsurance capital reached a record USD4.0trn.

For many insurers, Big Data is the presumed answer to the question of how to grow profitability in an environment with record capital levels.  The study discusses Big Data and its potential transformative effects on the insurance industry, and also discusses other emerging trends including: the effects of technology on motor insurance, new capital demands in the U.S. health insurance market, rising frequency of cyber attacks, and advanced modeling capabilities for China crop insurance.

Stephen Mildenhall, Global Chief Executive Officer of Analytics for Aon, said: "There are many bright spots within today's rapidly evolving insurance marketplace.  The overall global combined ratio under 100 percent, and the variation in results by country, clearly show there are many desirable areas for profitable growth in the market today. In addition, the continued flow of cheaper alternative capital into the industry provides a competitive cost-advantage to early adopters. The potential pay-off to innovation is higher today than it has been for many years."

The 2014 Insurance Risk Study includes a "country opportunity index" which ranks the desirability of the top 50 markets based on a mix of profitability, growth potential, and political environment. Saudi Arabia leads the index with a combined ratio of 91.5 percent and strong projected growth of 8.1 percent, followed by the Ecuador and Singapore markets. Hong Kong, China, and Australia were all new entrants to the top quartile of the index this year.

Aon Benfield Analytics forecasts that global P&C insurance premium will increase by 18 percent over the next five years to reach USD1.6trn by 2018, driven by strong growth in China.

Insurance risk remains core to the study. The 9th edition includes Aon Benfield's comprehensive view of risk by product line for 49 countries using techniques applied consistently since 2005.

The Insurance Risk Study continues to be the industry's leading set of risk parameters for modeling and benchmarking underwriting risk and global profitability, and draws on Aon Benfield's USD130m annual investment in analytical tools and solutions.

To view the full report, please follow the link below:
http://bit.ly/1wke9dc

About Aon Benfield
Aon Benfield, a division of Aon plc, is the world's leading reinsurance intermediary and full-service capital advisor. We empower our clients to better understand, manage and transfer risk through innovative solutions and personalised access to all forms of global reinsurance capital across treaty, facultative and capital markets. As a trusted advocate, we deliver local reach to the world's markets, an unparalleled investment in innovative analytics, including catastrophe management, actuarial and rating agency advisory. Through our professionals' expertise and experience, we advise clients in making optimal capital choices that will empower results and improve operational effectiveness for their business. With more than 80 offices in 50 countries, our worldwide client base has access to the broadest portfolio of integrated capital solutions and services. To learn how Aon Benfield helps empower results, please visit aonbenfield.com.

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SOURCE Aon Benfield