Swiss Re expects global insurance industry profits to increase this year. Last year the worldwide insurance industry wrote premiums of $US3.426 trillion ($4.559 trillion) – or 7.7% of global GDP – with life insurance premiums rising 3.9% and non-life 0.6%.

The company says in its latest Sigma research paper that the non-life sector had almost zero growth last year in saturated markets, but hurricane losses in 2005 will support premium growth in the US this year.

The report says industrialised and emerging markets differ markedly in premium and growth terms. The industrialised countries generated more than 80% of world premiums but grew only 1.9%.

Meanwhile, emerging markets benefitted from their hardening currencies and had a growth rate of 6.9%. South Asia and East Asia reported particularly strong growth of 9.5%.

The study showed the highest premium increases for European life insurers since 2000 occurred in 2005.

Swiss re says profits are set to rise further after the industry showed last year it had a tight grip on costs and was making money out of underwriting, unlike in the past when it relied on investment income.