Reinsurance market slated for 6.5% annual growth until 2032

Thanks to reinsurers expanding into new markets.

The global reinsurance market, valued at $350.1b in 2023, is projected to grow at a compound annual growth rate (CAGR) of 6.5% from 2024 to 2032, according to Global Market Insights.

This growth is driven by reinsurers expanding into new markets and diversifying risks through globalisation, allowing them to reach broader client bases and engage in cross-border collaborations and partnerships.

Key demographic factors, such as urbanisation and population growth, are influencing the demand for reinsurance. Currently, 56% of the global population resides in urban areas, which generate 80% of global GDP, according to the World Bank. 

This concentration of economic activity creates a growing need for insurance products, including life, health, and property coverage. Reinsurers are pivotal in providing the capacity and risk management required to meet these demands, especially in regions vulnerable to natural disasters. 

In 2021, global natural catastrophes led to economic losses of $270 billion, highlighting the importance of reinsurance in supporting financial resilience.

However, the industry faces significant challenges such as cyber threats, climate change, and geopolitical instability. Reinsurers must stay ahead of these risks by innovating in risk modelling and developing new products. 

The rise of alternative capital providers is also reshaping the market, offering lower costs and higher risk tolerance, which pressures traditional reinsurers to reduce premiums in order to stay competitive.

Artificial intelligence (AI) is playing a transformative role in the sector, enhancing reinsurers' ability to assess risks more efficiently by converting complex contracts into data for risk modelling. AI also enables reinsurers to engage earlier in the value chain, building stronger relationships with clients. 

Non-life reinsurance held a 58% market share in 2023, driven by increased awareness of climate change and the demand for coverage tailored to these risks. The treaty reinsurance segment was valued at over $207b in 2023, with growing complexity in insurance portfolios pushing insurers to rely on treaty reinsurance for more efficient risk transfer.

The Belt and Road Initiative is also driving reinsurance growth across Asia, with Chinese reinsurers expanding globally, whilst India implements regulatory reforms to enhance its insurance and reinsurance sectors.