The global risk insurance industry will continue to experience growth this year, but not at the pace it has managed in the past couple of years, according to Swiss Re’s latest Sigma report.

The report says while economic growth will foster insurance demand, “pricing developments will hold back premium growth”.

“Assuming average claims levels, return on sales may be a low double-digit figure again in 2005,” it said.

The study highlights the return to growth in the life industry and positive underwriting results by general insurers last year.

But it predicts that while this year is likely to see increased growth for the life industry, there’s a deceleration of growth in the general insurance sector.

Thomas Hess, Swiss Re’s Head of Economic Research and Consulting, says the international industry has “reaped the benefits of focusing on underwriting discipline”. Even life premiums returned to growth last year.

“With its financial strength improving further in 2004, the industry is in good shape to leverage growth opportunities in 2005,” he said.

General insurance business expanded by 2.3% last year, following substantial increases in the past two years (9% in 2002 and 6.4% in 2003). The survey shows growth in the US and Western Europe counter-balanced a decline in Japan. Premiums in emerging markets rose on average by 7.7%, and China, Russia, South Africa and India recorded double-digit real growth rates.