The global insurance sector is set for strong growth until 2020, according to a new report from Munich Re.

Expansion will be particularly strong in emerging markets, but reinsurance growth will be slower than the primary industry, its annual Insurance Market Outlook says.

“The global economic recovery is also benefitting the insurance industry,” Munich Re Chief Economist Michael Menhart said.

“We expect the economies of key industrialised countries to improve in the second half of [this year] and [next year]. Consequently, this will lend impetus to demand for insurance.”

The property and casualty (P&C) insurance market will grow about 50% by 2020 to €1.85 trillion ($2.44 trillion), while the life insurance market will grow almost two-thirds to €3.1 trillion ($4.08 trillion), Munich Re estimates.

The global primary insurance market will see premium growth of almost 3% this year and about 3.5% next year on a “revival of life insurance business”, it forecasts.

In reinsurance, growth of about 1% is expected this year, rising to 2.3% next year. The life reinsurance sector is expected to outperform P&C reinsurance.

Mature markets will “remain the dominating growth force”, maintaining a total primary insurance premium market share of about 73% in 2020.

The market share of Asia’s emerging economies will double from 8% last year to 16% in 2020, Munich Re says.

“Approximately half of all the additional premium earned between [this year] and 2020 will come from the US, China and Japan,” Mr Menhart said.

“In this respect, saturated markets and emerging markets both represent great potential for growth in insurance and reinsurance alike.”