2017 Economic and Sector Outlook

Situational report prepared by Mapfre Economics offering a general view of the key financial and macroeconomic trends for 2017, as well as an assessment of their interconnection and impact on insurance activity. The first part of the report analyzes the global economic environment, characterizing it as “secular stagnation” (low level of economic activity, low inflation, and low interest rates). This conceptual framework is the starting point to evaluate the loss of monetary policy effectiveness, and the growing need to more active use of fiscal policy as a way of injecting new stimulus into economic activity. The second part of the report offers an analysis of the mechanisms through which the global economic activity will affect the insurance sector. A general conceptual framework is included, as well as a quantitative analysis that foresees an acceleration in the insurance business throughout 2017-2018 both in developing and emerging markets, the latter leading the path toward growth. Further, it provides a perspective on the major regulatory trends that can affect the insurance sector in 2017.