Industry Analysis & Industry Trends
The Global Reinsurance Carriers industry, which provides support to direct insurance markets all over the world, has suffered over the past five years. This will cap off a slow growth period characterized by low-interest rates, a prolonged soft insurance market and severe currency headwinds for many global reinsurers. Nevertheless, the industry is projected to return to more robust growth over the next five years, particularly in emerging markets.In addition, global demand for reinsurance is growing, as more direct insurers look to shore up their capital positions before taking on more business. Furthermore, renewed commitment to higher interest rates in the United States are set to benefit the investment income garnered by reinsurers.
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The Global Reinsurance Carriers industry has a moderate level of capital intensity. For every dollar absorbed by labor, $0.18 is allocated to capital equipment. This ratio varies, however, depending on the nature of the market and the size of a reinsurer. In developed markets, capital expenditure is low, with the technology platforms in place and scale economies, less capital is required per dollar of revenue. As the volume of reinsurance business increases, the level of capital intensity generally declines because technological platforms at the most only need to be expanded, whereas increased business volume requires extra staff to process claims and administer accounts... read more