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Growth in non-life (re)insurance is mainly driven by emerging markets. The market and its profitability remained fairly stable in 2018 compared to previous years. Property rates have increased every quarter since the series of natural catastrophes that took place in 2017. Losses, especially those stemming from natural catastrophes, are at a period low. The expansion of alternative capital slowed down in 2019, although it retained a high relative share of overall reinsurance capital.
The life insurance industry has operated in a low interest rate environment for a decade. This strains profitability, but abrupt rate increases also pose a risk. Sudden spikes could not only affect leverage and liquidity profiles but also lead to policy lapses and surrenders (full policy cancellations).
The life insurance sector is experiencing several challenges. Sales of guaranteed rate products are struggling to grow because yields are low. As a result, in some jurisdictions, unit-linked business is the main driver of growth in life insurance. Several insurers are also shifting their focus towards asset management or were taken over by asset managers, while some markets have seen more insurers owned by private equity funds.
Cyber-insurance is a new and rapidly growing line of insurance business. This report illustrates how market participants price this risk in the absence of historical data sets and points to the main challenges of managing the risks involved in this type of business. It also covers the main regulatory considerations for cyber-insurance. This report discusses these issues in four chapters: