The financial outlook for the global insurance industry has improved “slightly” over the past year, despite an uncertain economy, according to Munich Re’s market report for this month.

The reinsurer expects global insurance premiums to grow about 4% on average in the next two years.

“Premiums in property and casualty (P&C) insurance are likely to benefit from stabilising economic conditions in the industrialised countries, but we see the weakness of some important emerging economies having a negative impact there,” it says.

With continuing low growth in investment and “sluggish” world trade, the global economy is likely to show only moderate growth this year and next.

“We expect robust economic growth in the US and continuing recovery in Europe, but a further slowing of growth in China. The economic risks remain generally high.”

Premium growth in P&C insurance is expected to average close to 4% globally in the next two years, but premiums are expected to grow by less than 3% in North America and western Europe due to “market saturation and fiercer competition”.

Growth of 3-4% is more likely in developed Asia-Pacific markets. Continuing high demand for insurance in emerging Asian countries is expected to drive growth rates of more than 10% this year and next, Munich Re says.