Executive summary

The Global Insurance Market Trends series monitors the overall performance and health of the insurance industry annually. This edition examines the underwriting and investment performance as well as the overall profitability of insurers in 2022, a year of elevated inflation, rising interest rates and volatile financial markets.

Premiums and claims payments increased faster in the non-life than in the life sector in 2022

After a slowdown in 2020 and a subsequent rebound in 2021, gross written premiums continue to grow in nomimal terms in both the life and non-life sectors in 2022. Premiums in the non-life segment grew at a faster pace than the life segment, which was held down by competition from other financial products and financial market volatility that was detrimental to unit-linked products. Growth in the non-life segment was partly a result of the post-COVID economic recovery, as well as higher claims costs leading non-life insurers to raise their policy rates. Nonetheless, in over half of the reporting jurisdictions, claims payments and operating expenses grew faster than premium growth in the non-life sector in 2022, leading to lower underwriting gains for these insurers.

Most insurers recorded investment losses in real terms in 2022

Bonds make up the largest share of insurers’ investment portfolios, especially those operating in the life sector, given their long-term liabilities. However, insurers can also hold significant shares of their assets in equities. Rising interest rates and falling equity valuations affected the investment performance of insurers in 2022, which was generally lower than in 2021 – and mainly negative in real terms. The valuation of some of the securities at amortised costs cushioned the negative impact of financial market developments somewhat. Yet, after adjusting for inflation, investment rates of return become negative in nearly all reporting jurisdictions.

Insurers achieved lower profits than in 2021

Insurers generally managed to record profits in 2022 despite challenges from the changing macro-economic environment. However, these profits were lower than in 2021, as the underwriting profits or investment gains fell. Their equity capital also tended to fall, especially for those operating in the life sector. This is likely a result of the unrealised losses on securities that were reflected through a downward revaluation of reserves in 2022.

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