The preliminary 2021 figures show Europe's reopening economies seeing rebounds in insurance premiums, albeit at different speeds. In most of the reporting markets, total premiums grew compared with the pre-pandemic year 2019, reads the latest Insurance Europe report on the evolution of the European insurance market in 2021*.

Here are some of the main highlights of the report:

• Life insurance achieved the highest rebound of the business lines, with GWP returning to their "normal" levels in 2021. Unit-Linked products lead the growth, but for the foresing future, the combination of still low interest rates and high inflation might prove challenging. As far as paid benefits are concerned, European market saw different total figures as a result of the combination of more surrenders and the impact of the four waves of excess mortality in the EU in 2020-2021 which resulted in higher mortality claims, but lower annuity pay-outs.
• Non-life insurance also recovered as economies reopened. The preliminary figures show that various markets booked positive growth in health and in P&C premiums in 2021, but as these lines are highly exposed to inflation, the growth could be the result of rising cost of goods and services already starting to affect premiums.
• While claims paid for motor claims saw mixed trends, growth in paid claims being mostly the result of the increased traffic and higher costs. Health claims also grew in most countries, as an expect trend following the delays to treatment in 2021. As for property insurance, in addition to personal and commercial increases, climate-related claims such as floods and storms reached a new record high in some markets.

The main concern for the immediate future is related to the high inflation, which is expected to continue challenging European insurers. According to the Insurance Europe's report authors, high inflation will trigger higher claims costs, which eventually filter through to higher premiums. On the other hand, high inflation is also expected to have an impact on many people's ability to purchase certain products and services, possibly affecting people's saving capacity. A positive trend may arise from the increase in interest rates which is positive for the life insurance sector.

Read the full report on the Insurance Europe website.

*European insurance: Preliminary figures 2021, July 2022