Global insurance premiums are likely to rise at a moderate pace this year after returning to growth last year with a 2.4% increase, according to Swiss Re’s latest Sigma study.

Economic expansion in emerging markets and price rises in some advanced economies raised non-life premium volumes by 2.6% to $US4.61 trillion ($4.97 trillion) last year, but short-term growth is likely to remain below pre-financial crisis levels, Swiss Re says.

“Rate increases will necessarily only be moderate [because] there is no capacity shortage and the weak economic conditions will constrain demand for additional insurance cover.”

Life insurance premiums grew 2.3% to $US2.62 trillion ($2.82 trillion) last year – after contracting 3.3% the previous year – driven by emerging markets and demand in the US and advanced Asian economies.

Emerging market growth will probably accelerate as insurers in China and India adapt to new regulations, while weakness in western Europe will dampen advanced markets.

Australian non-life insurance premiums grew 4.9% last year as prices firmed and risk awareness rose, according to the report.

“The trend of favourable pricing is likely to continue due to better disaster awareness after the continuous run of natural catastrophes in recent years.”

New Zealand non-life insurance premiums grew 2.9% last year after rising 1.2% a year earlier.

Life insurance premiums dropped 5.3% in Australia and increased 6.8% in New Zealand, driven by trauma and income protection products.

“Premium growth in Oceania is expected to improve [this year] from solid economic growth and sustained demand for risk products, and despite a challenging regulatory environment,” Swiss Re says.

In its 50-year outlook, Swiss Re predicts Africa could become an important part of the global insurance market as its share of the world population rises.