Economic factors such as the inflation rate, economic conditions, financial market and the rate of economic growth affect global insurance market. The industry promised a significant growth in 2015 in both advanced and emerging economies. The insurance sector is growing rapidly in developing countries in comparison to the developed countries. But this growth is going to be temporary. Health insurance is the most lucrative sector and about half of the global population is under the coverage of various health insurance policies.
Mergers and Acquisitions(M&A)
There has been a surge in Mergers and Acquisitions in the insurance industry in the last year. Mergers and Acquisitions can improve efficiency in providing insurance cover, riders and can benefit insurers as well. This also reduces the risk for the insurer to effectively reduce reinsurance. Mergers and Acquisitions also provide financial support to the insurer. At the time, when insurer has to provide the sum insured to customer, Merger and Acquisition helps. There is a rising trend of Mergers and Acquisition in insurance sector. These Mergers and Acquisitions are engaged in dealing with both life and non-life insurance as well as reinsurance sector.
- Non-life sector has a lower rate of growth in premiums than life insurance sector
- The OECD countries registered positive growth rate in premium in both life and non-life insurance category
- Insurers consider risk pooling as the key driver for growth in insurance market
- Auto insurers are shifting towards usage based insurers which will help them in customer base segmentation and enhance claim handling capabilities
- For processing claim capabilities, insurers are taking help from big data
- There is an increase in use of aerial and digital imagery of the location because visiting the event site is time consuming and risky. Also visiting the site requires time and there will be a delay in process of addressing the claim
- There is an increasing demand for cyber insurance. Most of the companies want to protect themselves from cyber-attacks or threats, it is expected that cyber insurance will become a default choice of many companies. It is another trend that will take the insurance market by force.
- There is a new concept of peer to peer insurance has reduce the cost of insurance, thus many uninsured will buy an insurance policy
- To understand the authentic customer’s risk profile for health insurance and the avoid the incidence of moral hazard, insurers are using mhealth apps
Insurers are developing various applications to keep a track of their customers. They are developing mobile health apps and developing technology of aerial and digital imagery to verify the details of claim made.
This industry requires trained professionals and experts and the problem is that there is a shortage of trained professionals at all the levels in the industry which stymies the full growth potential of the industry.
A positive growth has been witnessed in the global insurance industry showcasing moderate growth in 2015. The global insurance premium grew by 4.0% in 2015 and further expected to post similar growth trend in 2016. There was not much growth seen n world economy last year however 2016 is expected to post strong results in terms of economy growth and development. Non-life premiums took the charge of the growth in the insurance sector whereas life insurance sector underperformed.
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