Global Reinsurance Market Size (2024 - 2030)

The Global Reinsurance Market, previously valued at USD 618.41 billion, is anticipated to attain a market size of USD 1144.23 billion by the culmination of 2030. The market is poised for a growth trajectory with a projected Compound Annual Growth Rate (CAGR) of 10.8% during the forecast period spanning from 2024 to 2030.

REINSURANCE INDUSTRY OVERVIEW

In similarity to primary markets, reinsurance confronts the challenge of managing surplus capital. International reinsurance companies have expanded their global footprint, particularly in Asia and Latin America, to broaden their client base. Concurrently, local and regional companies have ventured into international markets. The distinction between primary insurance and reinsurance has blurred in the past decade, as many entities now offer both types of coverage. Pure-play reinsurance businesses exclusively providing non-life and life/health insurance are limited. Consumer demand for asset protection, coupled with corporate needs for liability coverage, has increased amidst rising crime rates. Economic and social conditions, marked by liberalization, privatization, and de-monopolization, influence the demand for insurance. Reinsurers typically conduct independent business domestically and internationally, with some exceptions where certain businesses limit insurers to specific reinsurers or markets. Some countries, including Latvia, Lithuania, Moldova, Romania, and Slovenia, prefer foreign placement only when domestic reinsurers are unable to meet industry demands.

The digital transformation has ushered in a new era for the reinsurance sector, with customers increasingly cognizant of internet-related risks. There is a growing demand for enhanced online accountability and transparency. The Swiss Digital Initiative's Digital Trust Badge, the world's first digital responsibility label, has granted approval to only two firms, including Swiss Re, for their digital products. The Swiss Digital Trust Label serves as a recognition for reliable digital services, enabling digital service providers to assert their commitment to digital responsibility.

COVID-19 IMPACT ON THE REINSURANCE MARKET

The COVID-19 pandemic has introduced complexities to the reinsurance landscape. While some markets experience increased demand as insurers seek to minimize exposure, government interventions, such as in the trade credit market, may lead to a decline in demand. Fitch Ratings anticipates a rise in reinsurance demand due to pandemic-related uncertainties and escalating primary insurance costs. Reinsurance companies are expected to play a crucial role in managing the consequences of COVID-19 as the market becomes more competitive. Significant changes to the reinsurance industry are forecasted, with initiatives like Pandemic Re potentially contributing to these shifts.

MARKET DRIVERS:

Protection against Natural disasters, growing loss cost inflation and other factor is propelling the market expansion.

The market expansion is driven by factors such as protection against natural disasters, growing loss cost inflation, and other influencing elements. Natural disasters, escalating loss cost inflation, and historically low investment profits contribute to the prevailing pricing trends. Market discipline has intensified due to natural calamities and economic uncertainties, resulting in more stringent terms and conditions. The aftermath of events like Hurricane Katrina, causing substantial economic and insured damages, has heightened the demand for reinsurance capacity. Increased catastrophic activity and adverse loss cost trends emphasize the necessity for rate increases, while dominant players in the life reinsurance markets reduce competition.

Growing technology like AI/ML is fueling the market expansion.

The growth of technology, particularly Artificial Intelligence (AI) and Machine Learning (ML), acts as a catalyst for market expansion. Various reinsurance companies have incorporated AI and ML in their operations to enhance efficiency. For instance, Munich Re'sCertAI validation service ensures ethical AI deployment and verifies the reliability of AI in innovative product solutions, addressing the need for responsible AI application.

MARKET RESTRAINTS:

Reinsurance capital has been impacted by unrealized investment losses and unfavorable currency fluctuations

Reinsurance capital faces challenges from unrealized investment losses and unfavorable currency fluctuations. Despite steady operational earnings and low catastrophe activity, reinsurance capital has experienced a reduction across all sectors due to these challenges.

REINSURANCE MARKET - BY DISTRIBUTION CHANNEL

• Direct Writing
• Broker

In terms of distribution channels, the reinsurance market is divided into Direct Writing and Broker. The Broker channels are expected to contribute the highest reinsurance income between 2022 and 2030, with a Compound Annual Growth Rate (CAGR) of approximately 4.6%. The primary responsibility of the reinsurance broker is to connect the insurance needs of the reinsured and the reinsurer, negotiating mutually agreeable reinsurance terms. The broker also assists in planning and developing the reinsurance program, including gathering proposal data and relevant premium and loss statistical information. A recent study by PartnerRe and Advisen indicates a growing demand for cyber reinsurance, reflecting an increased awareness of cyber insurance protection and a trend towards higher coverage amounts.

REINSURANCE MARKET – BY END-USER

• Life & Health Reinsurance
• Non-Life/Property & Casualty Reinsurance

In terms of end-users, the reinsurance market is categorized into Life & Health Reinsurance and Non-Life/Property & Casualty Reinsurance. The Non-Life/Property & Casualty Reinsurance Companies category is projected to experience the highest CAGR of around 4.3% between 2022 and 2030 in reinsurance revenue growth. The non-life reinsurance sector is influenced by technological advancements, alternative finance, and market structuring approaches. Major catastrophes and natural disasters have increased the demand for property and casualty reinsurance claims, leading to a wider adoption of reinsurance by insurers.

REINSURANCE MARKET - BY REGION

• North America
• Europe
• The Asia Pacific
• Latin America
• The Middle East
• Africa

Region-wise, the Reinsurance market is segmented into North America, Europe, Asia Pacific, Latin America, The Middle East, and Africa. The Asia Pacific is predicted to be the most profitable region with the fastest growth. The anticipated growth in the APAC reinsurance sector is attributed to demographic development and digital transformation dynamics. Singapore and Hong Kong have become major international reinsurance centers due to established regulatory frameworks and robust financial infrastructure. Climate volatility has increased risks associated with natural disasters, creating a substantial market potential for both insurance and reinsurance companies in the region.

REINSURANCE MARKET - BY COMPANIES

Some prominent players in the Reinsurance market include:

1. Barents re reinsurance inc.
2. Berkshire hathawayinc.
3. Bms group ltd.
4. China reinsurance (group) corporation
5. Everest re group, ltd.
6. Swiss re
7. Munich re
8. Covea
9. Brookfield reinsurance
10. Bluefire insurance
11. Scor se
12. Hannover re
13. Axasa
14. Zurich insurance group

NOTABLE HAPPENINGS IN THE REINSURANCE MARKET

• PARTNERSHIP: Swiss Re and NTUC Income collaborated to develop Singapore's first longevity plan in March 2022, securing the annuity book against future volatility.
• EXPANSION: SCOR signed a US$ 6.6 billion longevity reinsurance deal in February 2022, benefiting Lloyds Bank Pension Scheme No. 1 members.
• PARTNERSHIP: AXA XL Reinsurance and Bluefire Insurance completed a securitized reinsurance agreement in July 2020, enhancing capital efficiency for Bluefire's car portfolio.