The growth of China’s share in life insurance savings premiums is expected to outpace other markets in the coming decade, according to a study by Swiss Re.
From 2000 to 2022, new life insurance savings premiums worldwide totalled nearly $1.1 trillion, according to a study by Swiss Re. This is expected to rise sharply with around $1.7 trillion of additional savings premiums forecasted to be written from 2022 to 2023 alone.
By region, North America is expected to lose the most market share from 23.2 percent in the 2000-2022 period to 20.6 percent in the next decade. Western Europe is expected to stay flat while advanced Asia Pacific economies, including Japan, could lose 1 percent of market share. Emerging markets excluding China will gain 1 percent.
China is expected to be the biggest winner of new market share with a gain of 2.7 percent. Currently, it is the second largest savings premium market with $244 billion written which accounts for a share of 11 percent, behind the 25 percent share in the US.
Retirement Gap
One of the growth drivers for the market is the widening retirement savings gap. In eight major economies (Australia, Canada, China, India, Japan, Netherlands, the UK and the US), the gap was estimated to be $106 trillion in 2022. By 2050, this is forecasted to more than quadruple to $483 trillion.
«The growing private retirement savings market can represent a 65 percent increase in new business premiums compared to the past two decades. As reinsurers, our goal is to help our clients seize this opportunity and help narrow the retirement savings gap,» said Jonathan Graham, head of financial markets & inforce management, L&H RI, Swiss Re.
«This can be done in many ways, for instance, by co-developing competitive index-linked products, which are relevant for the accumulation and decumulation phases, or by leveraging our structured solutions capabilities to optimize our clients' in-force portfolios while stabilizing their balance sheets, reducing earnings volatility and increasing their capital efficiency.»
