As Swiss Re said in its press release, a growing number of smaller, specialised players drive efficiency gains, while robust reinsurers and alternative risk solutions help improve capacity in view of a riskier world. According to Swiss Re Institute, global P&C premiums are projected to grow broadly in line with GDP over the next 10 years, with total premiums set to almost double by 2040. At the same time, market concentration is easing as competition increases.
“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. Robust reinsurance and alternative risk solutions are further broadening capacity and helping keep protection accessible and affordable in an increasingly uncertain world”, said Jérôme Jean Haegeli, Swiss Re's Global Chief Economist.
A key driver of unlocking efficiency is the continuing disaggregation of the industry's value chain. Brokers and Managing General Agents are taking on a greater role in distribution and underwriting, allowing insurers to tap into specialist skills and scale. At the same time, the market is increasingly complementing traditional insurance with alternative risk solutions to keep pace with rising exposures, especially in catastrophe-prone regions. Captive insurers now represent an estimated USD 60 to USD 80 billion in global premiums, enabling corporates to self-insure higher-frequency risks while leveraging reinsurance capacity for peak exposures.
"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", commented Gianfranco Lot, Swiss Re's Chief Underwriting Officer P&C Reinsurance.
In emerging markets, the global split between commercial (46%) and personal (54%) lines is expected to hold, with commercial growth driven by expanding corporate exposures and personal lines supported by motor-penetration catch-up in emerging markets. Emerging markets already account for 20% of the world's P&C premium, unchanged since 2014. Rising technical capabilities mean that this share can climb beyond today's 20%, the sigma report says.
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