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“Increasingly, higher economic activity drives premium growth higher while lower economic activity slows down premium growth. As we enter the fourth quarter, economic activity, expressed as a change in GDP over the previous year, for the world's ten largest insurance markets, is expected to decline by -4.5% by 2020, "writes the report's author, Dr Michel Léonard, CBE, Vice President & Senior Economist, Triple-I.
The world's 10 largest insurance markets, in order, according to the definition of the total premium written 2018-2019, are: USA, China, Japan, Great Britain, France, Germany, South Korea, Italy, Canada and Taiwan, Triple-I's forecast for a 4.5 percent GDP reduction in the world's ten largest insurance markets in 2020 compared to 2019 was weighted based on the total premium written in each.
"The extent of new blockades, The success of vaccine trials and the impact of vaccine distribution will determine the pace of economic recovery in 2021, with consensus pointing to Q3 or Q4 2020 rounding the corner from the pandemic part of the recession. However, the economic activity will not heal and recover until well into 2021 and the beginning of 2022, says Dr. Léonard and adds: "Under the best case scenario, economic growth will not fully recover until Q2 and Q3 2021 in advanced economies and Q3 and Q4 in developing economies."
Global GDP is expected to decline between -5.5% and -6 , 5% 2020, according to the report, citing benchmark forecasts recently published by the International Monetary Fund (IMF) and the Organization for Economic Co-operation and Development (OECD).
GDP represents the value of the total goods and services that an economy produces for one year while the premium is the price paid for an insurance.In addition to premiums, insurers also generate income through investment income.