Insurance News

Swiss Re predicts gradual growth for insurers in 2010

Posted on: December 5, 2009

LONDON?A fragile economic recovery in 2010 will bring gradual growth for insurers and reinsurers, Swiss Reinsurance Co. predicts.

Thomas Hess, the Zurich-based reinsurer?s chief economist, said during an economic forum sponsored Tuesday by Swiss Re in London that global economic growth will not be strong in 2010 but will accelerate modestly in 2011.

?Monetary policy will shift to tightening in late 2010 at the earliest,? he said, ?and reductions in fiscal stimulus will follow shortly afterwards. As a consequence, growth and inflation are subdued.?

Insurers? balance sheets have recovered well since March, Swiss Re said in a statement issued after the meeting, and capital by November was nearly at levels not seen since late 2007. The reinsurer said it expects demand for nonlife and life insurance to improve along with the economy and capital markets in 2010.

Reinsurers have seen similar growth in capital, Swiss Re said. Those companies should see slightly better top-line growth next year, with profits improving or remaining stable.

Low investment yields will dampen income next year, but that will mean a sharper focus on underwriting and a competitive advantage for insurers and reinsurers that have a history of producing low combined ratios, said Mr. Hess.

Copyright © 2009 Crain Communications, Inc.

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