The global economic outlook is resembling a “mixed bag” as signs of recession permeate the economic environment, Jerome Haegeli, chief economist at Swiss Re told The Insurer.
“We see Germany almost already being in a recession, Poland already is in a recession and we see the US having a likelihood of 35 percent recession for next year,” he said.
“The fact is that 50 percent of the Eurozone is already contracting if you look at the latest GDP series and there’s definitely no Indian Summer in terms of the global economic outlook,” he added.
However, it’s not all doom and gloom. While the global economic environment might be taking a hit, there is more positive news on the insurance front.
“In terms of the insurance market outlook, this is more promising than the global macro environment,” he said. “We expect on the P&C side premiums to grow by around three percent which is quite a pick up from last year.
In terms of rates hardening, Haegeli said he sees this in a number of business lines. In addition, for commercial property pricing and other commercial markets, he said there has been “a very healthy pick up” in the rates environment.
“The fact is that for the seventh consecutive quarter, we have now seen price increases and that’s testimony to a good market environment on the insurance front,” he added.
On the subject of better accessing risk pools to improve profitability, Haegeli said technology is really important.
“I’m a big believer that this year for P&C and Swiss Re it’s the year of analytics,” he said. “We have a lot to gain by accessing the risk pools not only from a shareholders perspective but also in terms of the contributions to narrowing the protection gap [and the impact that has] for improving economic stability.
“We also released on the SIGMA front our indices on the macro front, in addition to the protection front and they showed the positive contribution insurance has in terms of giving and improving economic stability,” he added.