World life insurance markets are experiencing healthy growth this year, but the general insurance sector has proved stagnant, according to new research by Swiss Re.

The company’s Sigma Report, “World insurance in 2006”, shows insurance markets improved their capitalisation over last year but warns that profitability growth will have peaked before the end of this year.

The mixed outlook predicts continued strong growth for life insurance and wealth management business. These enjoyed real growth of 7.7 % over last year – beating growth in general economic activity in most of the 147 countries surveyed. Swiss Re says booming stock markets are one key contributor to the acceleration.

In contrast the general insurance sector enjoyed strong profits last year but actual growth was relatively low, particularly in established markets.

Throughout most of the industrialised world, non-life insurance premiums grew by an average of just 0.6%. Downward pressure on rates for non-catastrophe lines was the key factor involved.

But profits were largely unaffected. With relatively few catastrophes and natural disasters to pay claims on last year, many insurers posted record profits.

The outlook for this year is less positive. Swiss Re predicts “sluggish” premium growth in the general insurance sector and a “slight” deterioration in combined ratios. However, the outlook for profits in both the life insurance and general insurance sectors remains “robust”.