As the global property and casualty (P&C) insurance market continues to expand, industry giant Swiss Re has highlighted that robust reinsurance and alternative risk solutions are further broadening capacity and helping to keep coverage both affordable and accessible, which is vital in an increasingly uncertain risk landscape.
On the first day of the 67th Rendez-Vous de Septembre in Monte Carlo, Swiss Re Institute, part of the global reinsurer, released its latest sigma report, which explores the growth of the international P&C insurance sector.
The report finds that over the past two decades, the global P&C insurance industry has doubled in size to USD 2.4 trillion, with innovation over this time leading to broader access to coverage via traditional and alternative solutions.
Further growth is expected, with Swiss Re projecting global P&C premiums to grow broadly in line with GDP over the coming decade, with total premiums set to almost double by 2040, driven by rising natural catastrophe losses and asset accumulation, as well as economic and litigation claims inflation pressures, explains the report.
“The rapid expansion of the P&C market is not only about scale, but also about greater capability and resilience. Insurers have become more efficient at pricing, managing and transforming risk, supporting capacity even in times of heightened uncertainty. At the same time, insurers are passing on a larger share of the risk to reinsurers. This is a recognition of the demand for risk transfer and a trend that is set to continue given the risk landscape. A key pillar for reinsurers to fulfil their indispensable role as a shock absorber is a strong capital base,” said Jérôme Jean Haegeli, Swiss Re’s Global Chief Economist.
“Robust reinsurance and alternative risk solutions are further broadening capacity and helping keep protection
accessible and affordable in an increasingly uncertain world,” he added.
Over the past 20 years, the market has welcomed an increasing number of smaller, specialised players, which, alongside strong reinsurers and alternative solutions such as risk pools and captives, as highlighted by Swiss Re, help drive efficiency and enhance capacity, affordability, and insurability of risks more challenging to cover.
The report also notes the greater role played by brokers and MGAs in underwriting and distribution, stating that in order to unlock efficiency, continued disaggregation of the insurance sector’s value chain is required.
“The growth of the P&C insurance market is testament to its ability to navigate a complex risk landscape. Looking ahead, the adoption of AI in underwriting could steer the industry towards data-rich global insurers versus nimbler specialists. This shift is accompanied by a structural trend of transferring more risk to reinsurers, who remain a pillar of stability and an enabler of transformation,” said Gianfranco Lot, Swiss Re’s Chief Underwriting Officer P&C Reinsurance.
Interestingly, while primary P&C insurance recorded solid growth of 4.2% over the past decade, Swiss Re finds that reinsurance premiums grew at around 7% CAGR (compound annual growth rate) over the same period.
“This layered architecture of risk transfer – from capital-light originators to reinsurers to alternative-capital-
backed retrocession – has enhanced capital efficiency and market resilience but also introduced new dependencies on capital markets and investor sentiment,” explains the report.
In order for the disaggregated model to work, Swiss Re underlines the importance of risk modeling across risk areas such as nat cats, motor, liability, and cyber, emphasising how advances in these areas “facilitate the valuation, packaging and wholesale transfer of risk from capital-light originators to full-stack insurers and reinsurers.”
“Whether the recent growth of smaller players proves a lasting shift or a cyclical effect of hard markets will depend on pricing conditions, wholesale appetite and regulatory tolerance for capital-light models,” reads the report.
In terms of the split between mature and emerging markets growth, both personal and commercial P&C premiums in advanced markets almost doubled in the two decades to 2024, with property outpacing every other sub-line as exposures grew much faster than GDP.
In emerging markets, Swiss Re expects the global split between commercial (46%) and personal (54%) lines to hold. Currently, emerging markets account for 20% of the world’s P&C premium, unchanged since 2014. Although, Swiss Re believes that emerging markets share can increase on the back of rising technical capabilities.
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