Growth in insurance premiums has been forecast for 2014, according Dr Anne Gron.
The NERA Economic Consulting vice president presented the predictions on the first day of the Captive Insurance Companies Association International Conference in Scottsdale, Arizona.
In line with predicted GDP growth in developed economies, real premium growth is expected to rise between 2.5 and 5 percent in the coming year, while emerging markets have been forecast to grow by 7.1 percent.
Growth is also expected for non-life insurance, with the market forecast to grow by 3.8 percent worldwide in 2014. Traditional life insurance is also expected to grow, though only by 0.4 percent.
Although this is good news for the captive market, uncertainty remains due to the rising cost of reinsurance, which is primarily due to shrinking interest rates.
This trend has led to an increase in the presence of alternative insurance capital vehicles, reducing the profitability of traditional insurers.
The rising prominence of alternative insurance is expected to affect capacity, pricing and investment in the insurance industry as a whole, with the pricing of new business set to feel the brunt of the impact.
