© Reuters. File photo: The logo of the insurance company Swiss Re can be seen in front of the headquarters in Zurich, Switzerland on February 12, 2019. REUTERS/Arnd WIegmann/File Photo
New York (Reuters)-Despite obstacles such as low interest rates and inflation risks, the head of the insurance company Swiss Re (OTC:) AG stated that the global insurance industry is expected to recover from the pandemic faster and more powerfully than after the 2008 financial crisis. US economists in the recovery said on Friday.
Economist Thomas Holzheu told Reuters that unlike previous crises, the pandemic did not weaken the overall capital or financial strength of insurance companies, which allowed the company to add new insurance coverage and increase revenue.
In 2009 and 2010, when insurance companies suffered capital losses, slowing economic growth, and reduced corporate and personal income, it became more difficult to formulate new policies.
He added that by contrast, companies and individuals are now getting more funds from government stimulus and support programs and are more aware of the need to purchase risk protection measures.
“Compared with the financial crisis, we see stronger and more resilient demand for insurance-last year, this year and what we expect in the next few years-compared to the financial crisis, when the industry was part of the financial market problem,” He says.
Swiss Re’s view is consistent with other bullish signs. For example, insurance broker Marsh McLennan (NYSE:) Cos Inc said in May that global commercial insurance prices rose by an average of 18% in the first quarter of 2021 compared to the same period last year. Since the end of 2017, interest rates have been rising.
Swiss Re said that after only a 1.3% drop last year, it expects the annual growth rate of all premiums (not just commercial premiums) to reach 3.3% this year and 3.9% in 2022. In contrast, the 2008 financial crisis dropped by 3.7%, and the rebound in 2009 and 2010 slowed down by 0.5% and 2.1%, respectively.
Industry leader Travelers Companies (NYSE:) Inc beat Wall Street expectations by more than $1.00 per share on Tuesday.
Other large American insurance companies will announce their results in the next two weeks.
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