Trade flows have slowed in recent years, notes Swiss Re in its latest sigma, (2016 number 3).
“Global trade grew about twice as fast as world GDP between the early 1990s and mid-2000s, but has grown at the same pace as GDP in more recent years”, the report said.
The slowdown has in part been cyclical, because of only moderate economic growth. Sigma therefore predicted that trade “should pick up again once economic activity accelerates”.
But the report warned that the slowdown also reflected “deeper, structural factors”.
These included a limit in the further dispersion of global supply chains, protectionism and the transitioning of the Chinese economy from export- and investment-led growth to domestic services and consumption.
The negative impact of the trade slowdown on global growth would serve to reduce sector-wide premium growth generally.
Sigma warned that “a persistent slowdown in global trade will affect marine and credit insurance growth in particular”.