Non-life premium growth around the world was slower last year than in 2015, rising 2.4% in real terms, according to the International Association of Insurance Supervisors (IAIS).

In 2015 global growth was 3% in real terms.

However, in advanced economies growth was only 1.7% last year, compared with 2.5% in 2015.

The IAIS Global Insurance Market Report attributes this decline to weaker economic growth and a softer pricing environment in commercial insurance.

In emerging markets non-life premium growth was 5.3% last year, up slightly on 2015 but below the 8% annual average for 2000-14.

Growth in emerging markets is largely driven by motor insurance, which represents almost 60% of the total non-life market, the report says.

Natural catastrophe losses remained below the 10-year average, totalling $US42 billion ($54 billion) last year compared with $US37 billion ($48 billion) in 2015.

The earthquake that struck Japan’s Kumamoto prefecture last April brought an estimated insured loss of $US5 billion ($6.5 billion), the costliest disaster in the year.

Citing Insurance Information Institute data, the IAIS says it expects US non-life insurers’ net investment yields will have fallen to 3.1% last year, compared with 3.6% in 2015, resulting in a greater onus on underwriting and pricing discipline.

Despite the difficulties facing global non-life insurers, profitability remains.

Between 2013 and 2015 the US property and casualty insurance industry reported combined operating ratios comfortably below 100%, marking the first time since the beginning of the 1970s that underwriting was profitable for three consecutive years.

In Europe the combined operating ratio was broadly unchanged with an average close to 95% last year.

In Australia profitability improved in the first half of last year, with claims costs from natural catastrophes significantly lower than in the corresponding period of 2015, the report says.