Global life savings premiums to double previous decade, Swiss Re Institute says

Written by Adam Cadle

28/05/2024

An additional US$1.5trn of global life savings premiums will be generated over the next decade, more than double the amount of the previous decade, Swiss Re Institute has forecast.

In its new sigma study, Life insurance in the higher interest rate era: asset-savvy is the new asset-light, Swiss Re Institute said consumers are moving to buy life-savings products that secure higher retirement incomes. As a result, total global premiums are forecast to grow to US$4trn by 2034. In contrast, global life insurance premiums grew by only US$300bn in the entire low interest rate decade of 2010 to 2019.

Jérôme Jean Haegeli, Swiss Re's Group chief economist, said: "Higher interest rates are a game changer, providing life insurance and pension products a tailwind to much better tackle the retirement savings challenges of ageing demographics. Savings products are attractive again as a direct consequence of normalising interest rates. Higher investment yields also benefit long-duration protection products."

Swiss Re Institute also said it forecasts the operating result for insurers in the largest eight life markets worldwide, which include the US, UK, Germany and Japan, to rise by more than 60% as investment income rises by 40%. Significantly higher government bond yields are now improving life insurers’ investment returns and margins for fixed annuities, it said.

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