2023年安联全球保险业发展报告（英文版）

17May2023

04

10

14

Lookingback:strong

Aftertheinflation

Lookingahead:

growth

shock

dramaticchange

belowthesurface

18

Insurance'sroleas

anchorinturbulent

times

AllianzResearch

Anchorin

turbulenttimes

AllianzGlobalInsuranceReport2023

AllianzResearch

2

Executive

Summary

ArneHolzhausen

HeadofInsurance,WealthandTrends

arne.holzhausen@allianz

.com

MichaelaGrimm

SeniorEconomist

michaela.grimm@

KathrinStoffel

ExpertWealthMarkets

kathrin.stoffel@

PatriciaPelayo-Romero

ExpertInsurance

patricia.pelayo-romero@

withtheparticipationof

LucasChaka

ResearchAssistant

lucas.chaka@

•TotalglobalinsurancepremiumincomeamountedtoalmostEUR5.6trnin2022.

Liferemainsthelargestsegment(EUR2.6trn),aheadofp&c(EUR1.8trn)andhealth(EUR1.1trn).Lastyear,thepremiumpoolgrewbyEUR259bnor+4.9%–againstthebackdropofaglobalinflationrateof8.6%.

•However,thethreesegmentsfaredverydifferently:Whilepropertyand

casualty(p&c)clockedrobustgrowthof+8.7%,healthexpandedbyamore

modest+4.9%,andlifeinsurancemarketgrowthwasadismal+2.4%:squeezedrealhouseholdincomestookatollonprivatesavings.

•Theriseinp&cpremiumswasdrivenbyallregionsaroundtheglobe.However,withEUR77.5bn(+9.9%),morethanhalfoftheglobalincreasein2022camefromNorthAmericaalone;withpremiumincomeofEUR860bn,theregionremains

byfarthelargestmarketworldwide.Asia,too,sawhealthygrowthof+8.4%lastyear(+EUR31bn).WithtotalpremiumincomeofnearlyEUR403bn,theregion

overtookEuropeforthefirsttime(+4.0%orEUR15bntoEUR397bn).

•Lifeinsurancemarketssufferedlastyear,particularlyinWesternEurope:

Premiumincomedeclinedbyalmost-3%in2022(-EUR21bntoEUR740bn).

GrowthwasdisappointinginAsia,too,recordingamodestincreaseof+3.6%

(+EUR33bntoEUR952bn).Asinp&c,NorthAmericawasthemaingrowthdriverin2022,addingEUR61bninnewpremiums(+7.8%toEUR840bn).America’s

dominanceisevenmorepronouncedinhealth,wheretheUSmarketaccountsforaroundtwo-thirdsofallpremiumincomeworldwide.

•NorthAmerica–i.e.,theUS,whichaccountsfor94%oftheregion’spremium

pool–dominatedtheglobalinsurancemarketnotonlyin2022,butover

thelastdecade:Morethanhalfoftheincreaseinglobalpremiumincomein

p&candhealthwasgeneratedthere.Inlife,theshareisstillslightlybelow

one-third,whileAsiacommandsthebiggestsliceofthecake.Asaresult,the

region’sglobalmarketsharerosefromanalreadyimpressive39.6%in2012toawhopping43.9%in2022.ThisisinsharpcontrasttoWesternEurope,whichlostmorethan6ppstoreach23.8%.Theotherclear“loser”isJapan(-3.7ppsto5.5%),whileChinawasabletoalmostdoubleitsglobalshareto11.4%;therestofAsiastoodat10.1%.

•Ineconomicterms,navigatinganinflationaryenvironmentwillbethebiggestchallengeinthecomingyears.Fivestructuraldriverswilldetermineinflation(the"FiveDs"):demographics,deglobalization,decarbonization,digitalization

17May2023

3

anddebt.Overall,thefiveDsmightsignificantlyliftannualinflationbyupto

1pp.

•Despitehigherinflation–orperhapspreciselybecauseofit–premiumsaresettoincreaseby+5.2%p.a.overthenextdecade,addingEUR4,190bntotheglobalpremiumpool.In2033,premiumincomewillreachEUR4.3trninlife,

EUR3.1trninp&candEUR2.3trninhealth.

•WithEUR1,726bn,mostoftheincreasewillbeinthelifesegment.However,

annualgrowth(+4.7%)overthenextdecadeislikelytolagwellbehindgeneraleconomicgrowth(+5.2%).Insurancepenetrationwillthusfallby3ppsto2.8%.Asiawillremainthegrowthengineforthegloballifebusiness,withannual

growth(ex.Japan)expectedtoriseto+7.5%.Theregionshouldaccountforhalfofabsolutepremiumgrowth(EUR866bn),morethanNorthAmerica(EUR377bn)andEurope(EUR276bn)combined.

•Inthep&csegment,additionalpremiumswillamounttoEUR1,282bnby2033.

Thisrepresentsanannualgrowthrateof+5.0%,roughlyinlinewiththeprevious

decade(+5.1%)andgeneraleconomicgrowth(+5.2%);insurancepenetration

willthereforedecreaseonlyslightlyby1pp(to2.0%).Asinthelifesegment,

Asia(ex.Japan)isthecleargrowthchampionamongthemajorregions,withan

annualrateof+8.1%.Inabsoluteterms,however,theimportanceoftheregion

islowerthaninthelifesegment:"only"around35%oftheexpectedpremium

growth(EUR448bn)isattributabletoAsia,againstEUR357bninNorthAmerica

andEUR168bninEurope.

•Inviewofthemajortechnologicalupheavalsandnewandrisingrisks,thisforecast–whichsuggestscontinuity–maycomeasasurprise.However,thisappliesonlytothesurfaceofpremiumgrowth.Theunderlyingchangesaredramatic.

•Technologywillchangehowinsurersoperate.Ecosystems,forinstance,will

playadecisiveroleincustomeraccess,offeringnotonlyindividualproductsbutcomprehensive"solutions"forcustomerneeds,beitformobility,living,travel,

wealthorhealth.Artificialintelligenceopensunimaginedpossibilitiesindataanalyticsandcouldrevolutionizetheentirevaluechainfromunderwritingtoclaimshandling.

•Preservingitssocialrelevance–andwithititsbillion-dollarpremiumpool–theindustryisfacingafundamentalchangeinitsbusinessmodel:Thevaluepropositionofinsurerswillevolve,frompurefinancialcompensationtorisk

managementandholisticserviceofferingstopreventandmitigaterisks.Thisfollowsaninescapablelogic:Toclosethehugeprotectiongaps–inNatCat,cyber,healthorpension–mobilizingmorepremiumsmightnotbeenough;avoidingrisksinthefirstplacewillbecomemoreandmoreimportant.

•However,thistransformationwillplayoutoveralongtime.Inthemeantime,

insurancecanprovetheirworthinturbulenttimesofhighinflationandlow

growth.Theinsuranceindustrycannotundoinflation,butitcansmoothouttheimpact,actingasakindofbuffer.Itsresilienceintermsofliquidityandcredit

makesitabellwetherfortheinvestmentsneededtofinancethegreentransition.Insuranceisanessentialshockabsorberasitflattensthecurveoftheeconomiccycle.

4

Lookingback:

stronggrowth

AllianzResearch

.T

Theglobalinsuranceindustryprovedtoberesilientin

2022:InsurersworldwidecollectedmorethanEUR5.6trninlife,p&candhealthinsurancepremiums,morethaneverbefore.Theincreaseoverthepreviousyearamountstoanestimated+4.9%,inlinewiththeaveragegrowthrateof

thepastdecade(CAGR12012-2022:+5.0%).

However,therobustdevelopmentmustbeseenagainst

thebackdropofrapidlyrisinginflation:Inthelastyear

alone,theglobalinflationrateislikelytohavedoubled

from4.3%to8.6%.Inrealterms,therefore,thepicture

isbecomingmuchgloomier.Moreover,thegrowth

momentumhassloweddownconsiderablycompared

tothepreviousyear(+7.1%in2021)duetotheweak

developmentinthelifesector.Theupshot:Forasecond

yearinarow,premiumgrowthtrailedbehindoverall

economicgrowthandinsurancepenetration(premiumsasapercentageofGDP)continuedtofall,from7.1%in2020

to6.9%in2021and6.6%in2022.However,thedecline

ofinsurancepenetrationisnotjusttheconsequenceof

sky-highinflation.Itmustbeseenasalonger-termtrend

–albeitwithhugedifferencesbetweenthesegments.

Whilehealthinsuranceincreasedinrelevanceoverthe

lastdecade(albeitfromalowlevel)andp&cmanaged

tonarrowlydefenditsturf(notsurprisinglyasmanyp&c

insuranceproductsaremandatory),lifeinsurancedroppeddramatically:firstultra-lowinterestratesandnow

squeezedrealincomeshavetakenatollonprivatesavings(seeFigure1).

1CompoundAnnualGrowthRate.

17May2023

5

Figure1:Losingrelevance

Globalgrosswrittenpremiums*andnominalGDPgrowth*(y/y,in%)andglobalgrosswrittenpremiums*as%ofGDPbysegments

12.0

10.0

8.0

6.0

4.0

2.0

0.0

-2.0

20122013201420152016201720182019202020212022

GWP(life,p&candhealth)

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

0.8

1.3

2.2

2.1

3.9

3.1

2012lifep&chealth2022

*TheconversionintoEURisbasedon2022exchangerates.

Sources:Nationalfinancialsupervisoryauthorities,insuranceassociationsandstatisticaloffices,Axco,RefinitivDatastream,AllianzResearch.

Figure2depictsthegrowthdynamicin2022byregionandlineofbusiness.Theglobalmarketgrowthin2022was

primarilyfedbythesharpriseinp&cpremiumincome:Withanincreaseof+8.7%,premiumsforp&cinsuranceproductswrittenworldwideoutpacedhealthandlife

insurancemarketgrowth(+4.9%and+2.4%,respectively)byawidemargin.Andincontrasttoboththesesectors–

wheregrowthsignificantlysloweddownfrom+9.3%and+6.5%,respectively,in2021–thepaceofp&cpremiumgrowthevenacceleratedcomparedtothepreviousyear(+6.4%in2021).

Figure2:Lifeisadrag

Grosswrittenpremiumgrowth*,2022byregionin%

World

NorthAmerica

WesternEurope

AsiaexJPN&CHN

RestoftheWorld

CHN

JPN

-15.0

-10.0-5.00.05.010.015.0

total

health

life

p&c

20.0

*TheconversionintoEURisbasedon2022exchangerates.Japan:Healthispartoflife(thirdsectorproducts).

Sources:Nationalfinancialsupervisoryauthorities,insuranceassociationsandstatisticaloffices,Axco,RefinitivDatastream,AllianzResearch.

AllianzResearch

6

2.4

7.02.8

-12.4

-20.6

-1.7

5.3

Thesurgeinp&cbusinesslastyearwasdrivenbyall

regionsaroundtheglobe.AtthetopofthelistisNorth

Americaor,moreprecisely,theUSalone:Withalmost

EUR77.5bn,morethanhalfoftheworldwideincreaseinp&cpremiumscamefromthere(seeFigure3).In2022,

theUSp&cmarketstoodatanestimatedEUR802bn,

correspondingtoayear-over-yeargrowthofnearly+10%(CAGR2012-2022:+5.4%)andaglobalmarketshareofnearly45%.TheUSmightnolongerbetheundisputed

globalhegemonbutinthep&cbusinessitstillrulestheworld.

Accordingtoourprojections,insurersinWesternEuropewrote+4.0%morep&cbusinessintheregionthaninthepreviousyear,thehighestannualincreasesince2017.Inabsoluteterms,theincreaseamountedtoEUR15.3bn–onlyafractionofthegrowthseenintheUS.Insyncwiththeglobaldevelopment,thepaceofpremiumgrowth

didnotonlyaccelerate–albeitslightly–comparedto

thepreviousyear(+3.9%in2021)butwasalsowellabovetheaverageannualgrowthduringthepastdecade

(CAGR2012-2022:+2.5%).Whilepremiumgrowthinthecontinent’slargestmarket,Germany(+4.0%),wasinline

withtheregionalaverage,thedevelopmentinsmaller

marketssuchasAustria(+6.7%),Greece(+6.5%)and

Portugal(+6.4%),forexample,wasclearlyabove.WesternEuropeaccountedforaround22%ofglobalpremium

volumeattheendof2022(EUR397bn).

Asia'sp&cinsurancemarketgrowthincreasedsignificantlyfromonly+1.6%in2021to+8.4%lastyear,surpassingthelong-termaverage(CAGR2012-2022:+6.7%).Themain

driverofthereturnto“normal”AsiangrowthrateswastherecoveryoftheChinesemarket,whichaddedEUR12.2bninpremiums,almostasmuchasWesternEurope.AnotherEUR16.5bninadditionalpremiumswaswrittenintherestofAsia(withoutJapan),underliningtheimportanceoftheregionfortheglobalinsuranceindustry(seeFigure3).

In2022,Asianp&cpremiumincomeamountedtothe

equivalentofnearlyEUR403bn,correspondingtoaglobalmarketshareofjustunder22%.Thus,forthefirsttime,theentireregionwrotemorepremiumsinp&cthanWesternEurope.However,theAsianinsurancemarketisanythingbutahomogeneousmass.Thegrowthratesareinverselyproportionatetothematurityoftheindividualmarkets:

Figure3:UShegemony

Absolutepremiumgrowth*,2022byregioninEURbn

JPNCHNRestoftheWorldWesternEuropeNorthAmericaAsiaexJPN&CHN

16.5

77.5

61.0

15.3

35.3

20.9

12.2

2.5

12.8

22.3

lifep&chealth

*TheconversionintoEURisbasedon2022exchangerates.Japan:Healthispartoflife(thirdsectorproducts).

Sources:Nationalfinancialsupervisoryauthorities,insuranceassociationsandstatisticaloffices,Axco,RefinitivDatastream,AllianzResearch.

17May2023

7

themorematureamarketintermsoftheinsurance

penetrationrateanddensity2,thelowerthegrowthratestendtobe.InthewealthiermarketssuchasHongKong

(1.4%),Japan(+3.7%)andSingapore(+3.9%),growthin

2022wasinthelowsingledigits.Themostdynamicgroupofcountries,ontheotherhand,achieveddouble-digit

premiumgrowthacrosstheboard:Forexample,accordingtoourprojections,theincreasesrangedfromjustunder

+12%inMalaysiaandmorethan+16%inIndonesiaand

SriLankato+24%inthePhilippines.Intermsofvolume,

theAsianinsurancemarketisstilldominatedbythetwo

heavyweightsChinaandJapan,which,takentogether,

accountforalmosttwo-thirdsofregionalp&cpremium

income.ChinaalreadyovertookJapanin2010.Last

year,whenitsp&cpremiumincomegrewby+7%,China’smarketwasalmostthreetimesasbigasJapan’s.Takingthesetwocountriesoutoftheequation,marketgrowthfortheregionwas+12.8%lastyear,wellabovethelong-termaverageof+6.9%overthepastdecade.

Allotherinsurancemarkets(restoftheworld,global

marketshareof8.3%)recordedgrowthofaround+16%

inthep&csegment(CAGR2012-2022:+7.5%),drivenby

strong(largelyinflation-related)increasesinEastern

Europe(around+35%)andLatinAmerica(morethan

+23%).Thesetworegionsaccountforjustunder24%andagood36%,respectively,ofthisgroupofcountries’marketvolume.

Inthehealthsegment3,thedominanceoftheUSis

evenmorepronounced.Notonlywasthebulkofnew

premiumsin2022writtenintheUSbutoverall,too,theUSmarketaccountedforaroundtwo-thirdsofallpremium

incomeworldwide.Inmanyothermarkets,privatehealthinsuranceisstillanichesegment,albeitaverydynamicone:Globalpremiumgrowthreacheddouble-digitsoverthelastdecade(CAGR+10.1%).Inthelastthreeyears,

Covid-19fueleddemandforadditionalhealthprotection,notleastintheUS,wherepremiumincomeincreasedbymorethan+40%(orEUR211bn)inthattimespan.

Lifeinsurancemarketssufferedlastyear,particularly

inWesternEurope.Ontheoldcontinent,businesswith

lifeinsuranceproductsshrankbyalmost-3%year-on-

yearin2022(EUR20.6bn).Therefore,itsshareinglobalpremiumincomedecreasedby1.3ppsto28%.Basedonourprojections,theregion’slifepremiumincomecametoalmostEUR740bnattheendoflastyear,witharound

halfofthatbeingunderwritteninthetwolargestmarkets,theUKandFrance,alone.Withintheregion,however,thedevelopmentwasanythingbuthomogeneous.Markets

withhighsharesofsingle-premiumorunit-linkedproductsexperiencedheftydeclinesinpremiums.Whilethelife

insurancemarketintheUK,forinstance,isestimatedto

havegrownbyalmost+5%,premiumincomeinFrance

contractedbycloseto-3%.Germanyalsoreporteda

declineof-7%afteraminusof0.4%inthepreviousyear.

Inthesouthernpartofthecontinent,Italy(-11%)and

Portugal(-22%)recordedsharpdeclines,whileSpainandGreeceshowedincreasesof+4.2%and+2.4%,respectively.Overall,premiumgrowthin2022waswellbelowthe–

alreadyrelativelyweak–regionallong-termaverage(CAGR2012-2022:+1.8%).

BesidesWesternEurope,lifeinsurancemarket

developmentsdisappointedinlargepartsofAsia.At

+3.6%,regionalpremiumgrowthwaswaybelowthe

long-termaverage(CAGR2012-2022:+4.5%),butatleastsomewhatbetterthantheglobalaverage(+1.9%).As

inWesternEurope,nouniformpatternwasdiscernible

atthecountrylevel:Ontheonehand,bothsaturated

marketssuchasHongKong(-5.5%)andTaiwan(-26%)andcountrieswithastrongneedtocatchup,suchasIndonesia(-7.8%),thePhilippines(-0.5%)andThailand(-2.3%),saw

negativegrowth.Ontheotherhand,bothChinaand

Japan,accountingforaround60%ofregionalpremium

income,showedpositivegrowth.However,ataround

+10%,lifepremiumsinJapangrewmorethantwiceas

fastasthoseintheMiddleKingdom.Themaindriverwereso-called“thirdsector”products,whicharehealthpoliciessoldbylifeinsurersthatbenefitedfromelevateddemandforhealthprotectionintheaftermathofCovid-19.Attheendoflastyear,theregion’slifeinsurancemarketstoodatanestimatedEUR937bn,correspondingtoaglobal

marketshareof36%.Excludingthetwolargestmarkets,theregionpostedaslightdeclineof-0.4%lastyear(CAGR2012-2022:+5.6%).

2GrosswrittenpremiumsaspercentageofGDPandpercapita,respec-

tively.

3Ingeneral,datavisibilityofhealthinsurancepremiumsisstillrather

low.Often,healthpremiumsareincludedinothersegmentsashealth

coverageisseenaspartofotherproductsandnotseparatelyreported;in

Japan,forinstance,healthistreatedas“thirdsectorproducts”withinlife.

AllianzResearch

8

Justlikeinthep&cbusiness,thelion'sshareofgloballife

premiumincomewasstillwrittenintheUSlastyear:The

country’sglobalmarketshareaccountedforjustunder

30%–1.7ppsmorethanin2021.Innetterms,itgeneratedalloftheincreaseinlastyear’sglobalpremium.Attheendof2022,theUSlifeinsurancemarketstoodatanestimatedEUR777bn,correspondingtoayear-over-yeargrowthof

around+8%(CAGR2012-2022:+2.9%).

Allotherinsurancemarkets(restoftheworld,global

marketshareof3.4%)sufferedadeclineofaround-12%inthelifesegment(CAGR2012-2022:+1.6%)caused

bythesharpslumpofpremiumincomeinSouthAfrica

(-54%)whichusedtoberesponsibleforalmostone-thirdofpremiumincomeinthosecountries.Ontheotherhand,LatinAmericarecordedastrongincrease(nearly+12%),accountingfor43%ofthisgroupofcountries’market

volume.

Overall,insurerswroteEUR259bnmoreinpremiums

in2022thaninthepreviousyear(life:+EUR61bn;p&c:

+EUR145bn,health:+EUR53bn).Asdiscussed,North

Americaexplainsmostoftheincrease.ButtheUShas

playedanoutsizedroleinglobalinsurancemarkets

overthelastdecade,too.Inthisperiod,theUSinsurancemarketraiseditsglobalmarketsharefromanalready

impressive39.6%toawhopping43.9%.Thisisinsharp

contrasttoWesternEurope,whichlostmorethan6pps

toreach23.8%.Theotherclear“loser”isJapan,while

Chinawasabletoalmostdoubleitsglobalshareto11.4%.However,theUSdominanceisunlikelytoendsoon(see

Figure4).

Figure4:Mindthegap(betweentheUSandtherest)Totalgrosswrittenpremiums*,2012and2022byregionin%

5.3

NorthAmerica

2022

5.5

5.2

9.2

11.4

WesternEurope

6.0

39.8

43.9

AsiaexJPN&CHN

2012

9.8

10.1

CHN

30.1

JPN

23.8

RestoftheWorld

*TheconversionintoEURisbasedon2022exchangerates.

Sources:Nationalfinancialsupervisoryauthorities,insuranceassociationsandstatisticaloffices,Axco,RefinitivDatastream,AllianzResearch.

Lookingatthethreesegments,thedominanceofthe

USisclearinp&candparticularlyinhealth:Inboth

segments,theUSmarketaccountedforroughlyhalfandthree-quarters,respectively,oftheincreaseinglobal

premiumincomeoverthelastdecade.Inlife,however,theshareislessthanone-third.Inthissegment,Asia

commandsbyfarthebiggestsliceofthecake.WesternEurope,ontheotherhand,islosingsignificanceinallthreesegments;itnotonlytrailsbehindtheUSbutalsoAsia(seeFigure5).

Figure5:Theoldcontinenttrailsbehind

Shareofabsolutepremiumgrowth*byregion,2012-2022in%

1.9

31.7

life:

49.1

+EUR747bn

17.3

NorthAmerica

WesternEurope

Asia

Restofthe

World

10.7

27.5p&c:49.7

+EUR766bn

12.1

4.7

17.0

health:

6.9

+EUR738bn

71.5

*TheconversionintoEURisbasedon2022exchangerates.

Sources:Nationalfinancialsupervisoryauthorities,insuranceassociationsandstatisticaloffices,Axco,RefinitivDatastream,AllianzResearch.

9.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

17May2023

Decompositionofgrowth

Overthepasttwodecades,premiumincomefornon-lifeinsuranceproductsfromprivatecustomerbusinessintheEurozoneis

estimatedtohavegrownbynearly+70%tojustunderEUR172bn.Inabsoluteterms,thefourlargestmarketsintheregionaccountedforfour-fifthsofthisincrease:France(+EUR23.4bn),Germany(+EUR18.2bn),Spain(+EUR10.1bn)andItaly(+EUR4.6bn).TheFrenchp&cinsurancemarketalsotopsthelistintermsofrelativegrowth,whichmorethandoubledduringthisperiod.Premiumgrowth

inSpainwasalsoabove-averageatalmost+95%,whileGermany(justunder+55%)andItaly(nearly+26%)werewellbelowtheregionalaverage.

However,thesevalues"only"reflectthenominaldevelopment.Againstthebackgroundofgallopinginflation,whatproportionofmarketgrowthhasbeendowntoinflationoverthepast21years?Forouranalysis,weusetheinflationrateforexpensesforinsurancepolicies4recordedbyEurostataspartoftheharmonizedconsumerpriceindex.

Onaverageoverthelongterm,insuranceinflationintheEurozonelaggedslightlybehindthegeneralinflationrate(1.6%vs2.0%)(seeFigure6).Thedifferencesinsomeyearswereconsiderable,rangingfrom+2.3ppsin2010toawhopping-7.6ppslastyear–a

clearsignthattheindustryislagginginpassingtheinflationshocktoitscustomers.Withouttaking2022intoaccount,thetworatesraninsyncwitheachother(1.7%onaverage).Contrarytogeneralperception,however,theindustrydoesnotseemtobedriving

inflation.Ontheonehand,theintensityofcompetitionhaslimitedinsurers'abilitytoraiseprices;ontheotherhand,productivityincreases–notleastthankstothemanyopportunitiesofferedbydigitalization–haveprobablyreducedthecostpressureontheindustry.

Atthecountrylevel,nouniformpatternemerges.UnlikeinItalyandGermany,whereinsuranceinflationwas(slightly)belowthe

overallconsumerpriceindex,namely-0.1ppandeven1pp,respectively,itwashigherinSpain52(+0.6pp)andFrance(+0.2pp).Over

theperiodconsidered,theannualinsuranceinflationratesadduptoaround38%inItaly,agood40%inFranceandmorethan59%inSpain.Germany,witharound19%,pushestheregionalaveragedowntonearly34%.

Duetothebelow-averagedevelopmentintheinsurancemarket,averageinsuranceinflationinItalywasevenalmost13ppshigherthanpremiumgrowthitself.Inotherwords,theItalianretailp&cmarkethasshrunkoverthelasttwodecadesinrealterms.The

Spanishinsurancemarket,ontheotherhand,recordedabove-averagegrowthrates,buthereitwasthenoticeablyhigherinflationthatledtonearlytwo-thirdsofthemarketgrowthbeingattributabletopriceincreasesalone.InFrance,whichhadbyfarthehighestmarketgrowthinacountrycomparison,37%ofthepremiumincreasewasfedbypriceincreases.AlthoughtheinsurancemarketinGermanygrewatabelow-averagerateintheregionalcomparison,theinflationrate,whichwasalsobelowaverage,meantthat

"only"35%ofthemarketgrowthwasdrivenbyinflation.ThatmeansthattherealgrowthoftheGermanmarket(+35.6%)wasevenhigher–albeitonlymarginally–thanthatofSpain(+35.2%)andtheEurozoneaverage(+35.0%)sincetheendof2001(seeFigure7).FortheEurozone,thismeansthatnearlyhalfofthe(nominal)premiumgrowthoverthepasttwodecadeswasdrivenbyinsuranceinflationalone:justunderEUR36bnoftheadditionalpremiumswrittenfrom2002to2022wereduetovolumegrowthandalmost

EUR35bntopricegrowth.

4Asweconsiderthenon-lifeinsurancemarketwithouthealthinsuranceproductsinthisanalysis,wehaveadjustedthereportedinflationrateaccord-ingly.

5ForSpain,thereisnodataavailableoninsuranceinflationconnectedwiththedwellingintheyear2022;accordingtoEurostat,countriesarenot

obligedtocompileHICPindicesforitemswhichhaveaverylowweight(lessthan1per1000),inwhichcasethesecorrespondingsub-itemsaretrans-mittedwithaweightofzero.

Figure6:Notinthedrivingseat

HICPinsurance(exhealth)vsHICPallitems,annualrateofchange,2002-2022

4

2

0

-2

-4

-6

-8

-10

delta(lhs)HICPinsurance(exhealth)(rhs)HICPallitems(rhs)

200220032004200520062007200820092010201120122013201420152016201720182019202020212022

Figure7:Notallisreal

NominalP&Cmarket(privatecustomerbusiness)growthvsinsuranceinflation,2002-2022

120

100

80

60

40

20

0

NominalincreaseinGWPInsuranceinflation(exhealthinsurance),summedup

FranceGermanyItalySpainEuroarea

Sources:Eurostat,AllianzResearchSources:Eurostat,AllianzResearch

AllianzResearch

10

Afterthe

inflationshock

Digestinghigherrates:Theeconomicenvironment

Eveniftherathergloomyforecastsseemtospeaka

differentlanguage,thethemeoftheeconomicoutlook

forthenextfewyearsisnormalization.Aftertheextremeswingsofrecentyears,causedbytheCovid-19pandemicandthewarinUkraine,theglobaleconomyshouldreturntocalmerwaters.Calmistobeunderstoodquiteli