Risk and reward: Capacity growth in direct insurance markets will boost industry growth

Over the past five years to 2018, the Reinsurance Carriers industry, which provides insurance for primary insurance companies, has grappled with the increasing frequency of natural disasters and significant volatility in financial markets. However, reinsurers remained resilient through much of the recent storm. Industry operators maintained sound underwriting discipline, grew their capital levels and increased investment income to cover underwriting losses. demand for reinsurance underwriting has increased over the past five years as downstream demand for a wide array of insurance products increased. Over the five years to 2023, revenue is forecast to increase...purchase to read more.

Industry Statistics & Market Size
Revenue
$57bn
Annual Growth 13-18
6.6%
Forecast Growth 18-23
Profit
Employment
14,408
Businesses
381

Industry Threats & Opportunities

  • The industry will benefit from capacity growth in direct insurance markets
  • Demand for industry operators’ services has grown steadily as the broader economy expanded
  • Operators in the industry will benefit from rising premium prices and interest rate hikes
  • Industry Report - Industry SWOT Analysis Chapter

    Over the 10 years to 2023, industry value added, or contribution to the overall economy, is expected to increase at an annualized rate of 3.3%, which is higher than annualized US GDP growth of 2.2% during the same period as the stock and bond market continues to outpace overall economic growth. Despite the industry growing faster than the overall economy, it is considered to be in a mature stage of its life cycle. Growth within the US market has slowed as the acceptance of reinsurance solutions has neared saturation point. Domestic growth for reinsurance has also suffered because of offshoring activities and tax loopholes that have pushed many reinsurance transactions to tax haven countries such as Bermuda and the Cayman Islands...purchase to read more.

    Additional Insights for the Reinsurance Carriers Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Reinsurance Carriers Industry are

  • Disciplined underwriting processes
  • Ability to effectively manage risk
  • Must comply with government regulations
  • IBISWorld analysts also discuss how external factors such as Demand from property, casualty and direct insurance and Demand from life insurance and annuities in the Reinsurance Carriers industry impact industry performance..

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    What's in this report

    What is the Reinsurance Carriers Industry?

    Companies in this industry specialize in assuming all or part of the risk associated with existing insurance policies originally underwritten by other insurance carriers. In other words, the primary business of participants in this industry is insuring insurance companies.

    Industry Products
  • Life and health reinsurance
  • Property and casualty reinsurance
  • Investment activities
  • Industry Activities
  • Property and casualty reinsurance
  • Automobile reinsurance
  • Annuities, life and disability income reinsurance
  • Health and medical reinsurance
  • Surety and title reinsurance
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Demand from property, casualty and direct insurance
  • Demand from life insurance and annuities
  • Natural disaster index
  • Yield on 10-year Treasury note
  • S&P 500

  • Current Performance
  • Enduring volatility
  • Spreading risk
  • Chart: Revenue Growth

  • Industry Outlook
  • Potential for catastrophic losses increases
  • Downstream market fluctuations
  • Table: Reinsurance Carriers Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Reinsurance Carriers Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Life Insurance & Annuities
  • Health & Medical Insurance
  • Property, Casualty and Direct Insurance

  • Key Selling Industries
  • Insurance Brokers & Agencies
  • Reinsurance Carriers

  • Products & Services
  • Property and casualty reinsurance
  • Life and health reinsurance
  • Investment activities
  • Other
  • Chart: Reinsurance Carriers Industry Products and Services Segmentation

  • Demand Determinants
  • Underlying demand in primary insurance markets
  • Determinants of reinsurance capacity

  • Major Markets
  • Direct insurers (except life, health and medical)
  • Life, health and medical insurers
  • Chart: Major Market Segmentation for the Reinsurance Carriers Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Other
  • Wages
  • Chart: Cost Structure Benchmarking – Sector vs Reinsurance Carriers

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Reinsurance Carriers Industry

  • Industry Globalization
    Berkshire Hathaway Inc., Reinsurance Group of America Inc.,
  • Table: Berkshire Hathaway Inc. - financial performance
  • Table: Reinsurance Group of America Inc. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Reinsurance Carriers Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Reinsurance Carriers Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • S&P 500 (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Affiliated Reinsurer
  • A reinsurance company that has some common ownership interests with a group of insurers. US insurers often cede risks to foreign affiliates.
  • Capacity
  • The supply of insurance and the maximum amount of insurance a company or market can underwrite based on financial strength, or the policyholder's surplus.
  • Catastrophe (Cat) Bonds
  • A high-yield debt instrument that is usually insurance linked and meant to raise money in case of a catastrophe such as a hurricane or earthquake.
  • Cede
  • The action of an insurer passing risk to a reinsurer. The cedent purchases a contract indemnifying them for specific losses realized in assuming liability through the issuance of insurance policies.
  • Collateralized Reinsurance
  • Privately structured securities or derivatives used to gain participation to the traditional reinsurance market.
  • Combined Ratio
  • A measure of a firm's underwriting performance. A combined ratio of more than 100% indicates an underwriting loss, whereas a combined ratio of less than 100% indicates an underwriting profit.
  • Offshore
  • The relocation of a company's business process, such as manufacturing or accounting, from one country to another, whether the work is outsourced or stays within the company.
  • Retrocession
  • The reinsuring of reinsurance. A reinsurance transaction whereby a reinsurer cedes all or part of the reinsurance risk it has assumed to another reinsurer.
  • Unaffiliated Reinsurer
  • A reinsurance company that has no common ownership interests with a group of insurers. US insurers do not cede as much insurance to foreign unaffiliates.
  • Underwriting Performance
  • The performance of an insurer based only on the underwriting of insurance. It excludes the income, losses and expenses associated with investment activities.
  • What Our Customers Say

    Why buy this report?

    The Reinsurance Carriers Industry Research Report measures market size, analyses current and future trends, and provides an indication of market share for the industry’s largest companies. IBISWorld’s collection of industry market research reports gives you insightful, up-to-date information on the supply chains, economic drivers, and key buyers and markets for hundreds of industries.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Reinsurance Carriers:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Reinsurance Carriers market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Reinsurance Carriers, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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