2019 Insurance Outlook: Growing economy bolsters insurers, but longer-term trends may require transformationBrochure / report title goes here| Section title goes here
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Where do insurers stand as they enter 20191
Technology trends: Insurers appear poised to leverage cloud, blockchain 4
The future of work: Adaptation strategies becoming more important 7
Product development trends: IoT, InsurTech can enable more fexible policies9
Merger and acquisition trends: Insurers getting mixed signals11
Regulatory trends: Focus broadens from solvency to market conduct 14
Cyber risk trends: Regulations expand globally 18
Privacy trends: New rules put insurers in the hot seat 22
Tax reform: Early results positive, but long-term impact uncertain 27
Where do insurers ft in an evolving economy and society 29
Table of contents
2019 Insurance Outlook: Growing economy bolsters insurers, but longer-term trends may require transformationWhere do insurers stand
as they enter 2019
Sustained economic growth, rising interest rates, and
higher investment income are among the positive factors
that appear to be bolstering insurer results in 2018, setting
the stage for enhanced top- and bottom-line growth in the
year ahead.1 The US property and casualty (P&C) side of the
business got of to a particularly good start in the frst half,
with net income more than doubling compared to 2017
(see fgure 1).2
Although global consolidated fgures for 2018 will not be
available until the middle of 2019, data for the end of 2017
suggest that the non-US insurance industry is also growing,
but perhaps not as quickly as its American counterpart,
likely due to faster US economic expansion and
lower unemployment.
In the P&C sector, US premiums written grew 4.6 percent
in 2017, the highest percentage in the past decade,3 before
jumping by 12.7 percent in the frst half of 2018.4 Growth
is not nearly as robust globally—indeed, Swiss Re’s Sigma
reported that advanced markets, even including the faster-
rising US region, saw premium growth of just 1.9 percent last
year.5 Although premiums increased at a much healthier rate
of 6.1 percent in developing markets, that fgure was down
from 2016’s 9.8 percent, thanks largely to China’s growth
rate being cut by half to 10 percent.6
US P&C carriers have seen their insurable exposure base
continue to expand for both personal and commercial
lines, likely thanks in part to faster GDP gains, a shrinking
unemployment rate, and higher consumer spending. But
there has also been some luck behind improving results,
as insurers enjoyed a welcome frst-half respite from record
natural disaster losses—down globally by one-third to
$17 billion compared with the same period in 2017.7
This should cushion the fnancial hit from second-half
catastrophes, such as Hurricane Florence, which caused
major food losses but perhaps $5 billion or less in insured
damages, and Hurricane Michael, where insured loss
estimates ranged between $4.5 billion and $8 billion as
this report was compiled.
Reinsurers in particular seemed to have regrouped, with
the Reinsurance Association of America reporting frst-half
net premiums up by one-third and the combined ratio a
proftable 96.1.8
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Source: Deloitte analysis of consolidated industry results from S&P Global.a
Copyright2018, S&P Global Market Intelligence (and its afliates, as applicable)
P&C insurer benchmarks improving in frst-half
Figure 1. 2018 frst-half US P&C industry results
MetricP&C sector, 1H 2018 results
Net premiums writtenIncrease of 12.7%
Underwriting results300% turnaround, from a $3.7B 2017 loss to $6.7B gain
Combined ratioImprovement from 100.8 to 96.4
Net investment incomeGrew 12.2%
Net incomeMore than doubled to over $34B
Consolidated capital and surplusRise of 6.5% to $772B。