The growth chessboard: How leaders fuel profitable growth in insurance
We examined the performance of 46 insurers around the globe to identify the behaviors that the outperformers share.
The ongoing pandemic has significantly strained an industry that was already seeing tepid global growth in recent years. Global premiums grew just 3 percent a year from 2010 to 2019, consistent with global GDP growth, and the industry’s share of the global economy remained stagnant at about 7 percent.1 Despite the industry’s overall lukewarm performance, individual insurers’ premium growth rates varied significantly, with top-quintile performers far outpacing other players across geographies and coverage types (Exhibit 1). In some cases, bottom-quintile insurers experienced declines in net premiums earned, while industry leaders achieved double-digit growth.
We know from past experience that such disparities can be amplified during economic disruptions. For example, during the Great Recession, several high-performing insurers further increased their lead through both organic and inorganic growth. Companies with top-quintile total returns to shareholders (TRS) from 2007 to 2011 also increased their revenues by 30 percent and increased M&A volume by 20 to 50 percent more than their peers.2 In the current environment, outperforming the industry on growth becomes even more critical.