The 2021 Global Insurance Market Report

17 December 2021
Knowledge Base

The 2021 Global Insurance Market Report (GIMAR) reports on the outcome of the 2021 Global Monitoring Exercise (GME), the IAIS’ risk assessment framework to monitor key risks and trends and to detect the potential build-up of systemic risk in the global insurance sector. The report also provides an update on the outcome of the Covid-19 targeted assessment based on year-end 2020 data. The GME builds on data collected from approximately 60 of the largest international insurance groups (individual insurer monitoring or IIM) and aggregate sector-wide data from supervisors across the globe (sector-wide monitoring or SWM), covering over 90% of global written premiums.

The GME helps ensure that the international coordination of supervisory responses to mitigate systemic risk is grounded in evidence. Last year, the GME was repurposed to undertake a targeted assessment of the impact of Covid-19 on the global insurance sector, the results of which were published in the 2020 GIMAR Covid-19 edition. The targeted assessment of the impact of Covid-19 on the global insurance sector was updated this year and is based on year-end 2020 data.

The data showed that in the face of significant market movements and disrupted economic activity, insurers remained operationally and financially resilient. Strong performance of financial markets in the second half of 2020, supported by unprecedented fiscal and monetary stimuli, resulted in insurers’ solvency ratios continuing to improve in Q4 2020 compared to Q2 2020. On aggregate, however, Q4 2020 solvency ratios were below the baseline of Q4 2019. Insurers’ profitability continued to be under pressure, recovering slightly over the course of 2020. Liquidity positions remained stable overall.

Insurers continued to implement several measures in response to the pandemic, such as reduced shareholder dividends and share buy-backs, increased solvency and liquidity monitoring, debt issuance and measures to support solvency and liquidity across different subsidiaries. For the non-life insurance sector, lower economic activity increased underwriting profits in some lines of business, such as motor, property and casualty. Other lines of business such as event cancellation, travel, business interruption and credit insurance continued to be negatively affected. The life insurance sector was mainly impacted by declining interest rates in most regions, resulting in reduced profits due to increasing liabilities and decreasing revenues, alongside heightened reinvestment risk.

You can read the full 2021 Global Insurance Market Report here.

Source: IAIS

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