Global insurance market report [gimar]

1
Acronyms and Abbreviations
ACPR 
French Prudential Supervision and Resolution Authority
BaFin
German Federal Financial Supervisory Authority
BIS
Bank for International Settlements
BMA
Bermuda Monetary Authority
EIOPA
European Insurance and Occupational Pensions Authority
ESRB
European Systemic Risk Board
EU
European Union
FINMA
Swiss Financial Market Supervisory Authority
FSA
Japan Financial Supervisory Authority
FSC/FSS
Korean Financial Services Commission/Supervisory Service
GDP
Gross domestic product
GIMAR
Global Insurance Market Report
IAIS
International Association of Insurance Supervisors
IMF
International Monetary Fund
InsurTech
Insurance technology
IT
Information technology
IVASS
Italian Institute for the Supervision of Insurance
NAIC
National Association of Insurance Commissioners
NBB
National Bank of Belgium
OECD
Organisation for Economic Co-operation and Development
PRA
Prudential Regulation Authority, Bank of England
UK
United Kingdom 
ULIP
Unit-linked insurance product
US
United States
USD
United States dollar
VIX
Volatility index
ZZR
Zinszusatzreserve

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2
EXECUTIVE SUMMAR
Y
T
his edition of the Global Insurance Market 
Report (GIMAR) discusses the global 
(re)insurance
1
sector in 2019 from a 
supervisory perspective, focusing on recent 
performance and risks. The (re)insurance sector 
operates in a challenging global financial setting 
that is highly prone to vulnerabilities. Persistent 
trade tensions and slower economic growth may 
lead to the repricing of risks. This in turn may 
amplify low-yield vulnerabilities that have built up 
over previous years.
Growth in non-life (re)insurance is mainly 
driven by emerging markets. The market and 
its profitability remained fairly stable in 2018 
compared to previous years. Property rates 
have increased every quarter since the series 
of natural catastrophes that took place in 2017. 
Losses, especially those stemming from natural 
catastrophes, are at a period low. The expansion 
of alternative capital slowed down in 2019, 
although it retained a high relative share of overall 
reinsurance capital.
The life insurance industry has operated in a low 
interest rate environment for a decade.
2
This 
strains profitability, but abrupt rate increases also 
pose a risk. Sudden spikes could not only affect 
leverage and liquidity profiles but also lead to policy 
lapses and surrenders (full policy cancellations).
The life insurance sector is experiencing several 
challenges. Sales of guaranteed rate products are 
struggling to grow because yields are low. As a 
result, in some jurisdictions, unit-linked business is 
the main driver of growth in life insurance.
Several insurers are also shifting their focus 
towards asset management or were taken over by 
asset managers, while some markets have seen 
more insurers owned by private equity funds.
Cyber-insurance is a new and rapidly growing 
line of insurance business. This report illustrates 
how market participants price this risk in the 
absence of historical data sets and points to
the main challenges of managing the risks 
involved in this type of business. It also covers 
the main regulatory considerations for cyber-
insurance. This report discusses these issues
in four chapters:
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