Financial Markets Survey Show Europe's Insurers Outpacing U.S. Counterparts in Premiums

Financial markets in Europe lost ground to their U.S. counterparts in eight out of 17 categories between 2007 and 2008, but over the longer term, Europe has gained relative to the United States in 13 of those areas since 2004, according to a research report from International Financial Services London.

The U.K.-based research group found that in two of those categories -- overall insurance premiums and marine insurance premiums -- Europe is outpacing the United States.

Those two markets are among eight financial areas where Europe is larger than the United States overall. The other six areas are cross-border bank lending, commercial bank assets, foreign exchange turnover, international bond amounts, over-the-counter derivatives turnover and initial public offerings. Among those, Europe lost some ground to the United States only in IPOs from 2007 to 2008.

Insurance

IFSL measured overall insurance premiums in terms of insurance undertaken globally, including life and nonlife business, sold to individuals. The group said insurance premiums in Europe totaled US$1,765 billion (1,176 billion euros) in 2008, compared with US$1,241 billion in the United States. IFSL's index for Europe (where the United States is set at 100) puts European insurance premiums at 142 in 2008, up six points from the previous year. The European market has gained 58 points against the United States since 2001.

Europe represents 44% of the world market in overall insurance premiums, with the United States taking 31% of the share, according to IFSL.

European premiums have been higher than in the United States since 2004, according to IFSL.

According to IFSL, international marine insurance is the only general insurance line related to international high-risk business for which data allows international comparison.

IFSL found that marine insurance in Europe totaled US$12.5 billion in 2008, compared with the U.S. total of US$2.2 billion. The European marine premium total for 2008 fell from US$13.6 billion in 2007 and lost 55 points against the United States for the year, but still measures at 566 -- more than five times the U.S. total.

In the marine business, Europe has gained 141 points against the United States since 2001.

According to IFSL, Europe's 2008 decline in 2008 marine premiums "was almost entirely due to exchange rate adjustments to U.K. premiums -- the largest market in Europe and globally -- that may have exaggerated any underlying drop in Europe's marine premiums in 2008."

Europe's share of global marine insurance premiums is 56%, compared with 10% for the United States.

The trend toward European growth relative to the United States seen in the two insurance premium categories is similar to an overall trend among all 17 financial categories tracked by IFSL. In addition to IPOs, only three other categories have seen Europe losing ground to the United States since 2001: high-net-worth individual assets (measured from 2002 rather than 2001), foreign equity trading and equity market turnover.