The global property and casualty (P&C) insurance market has reached US$2.4 trillion, doubling in size over the past two decades, according to a new sigma report from Swiss Re Institute.
Presented during the Rendez-Vous de Septembre at Monte Carlo, the report attributes this growth to expanded access to coverage, driven by a combination of traditional and alternative insurance structures.
Swiss Re Institute notes that the industry’s evolution has been shaped by a rise in smaller, specialized firms and the growing use of alternative risk solutions. These trends have contributed to efficiency gains and increased capacity, particularly as the risk environment becomes more complex.
Jérôme Jean Haegeli (pictured above, left), Swiss Re’s group chief economist, said the P&C market’s expansion is about “greater capability and resilience,” not just scale. He explained that insurers have improved their ability to price, manage, and transfer risk, which has helped maintain capacity during periods of uncertainty.
Haegeli also observed that insurers are transferring a larger share of risk to reinsurers, reflecting ongoing demand for risk transfer and a trend likely to persist. He emphasized the importance of a strong capital base for reinsurers, stating that robust reinsurance and alternative risk solutions are broadening capacity and helping maintain accessible protection.
Looking ahead, Swiss Re Institute forecasts that global P&C premiums will grow in line with GDP over the next decade, with total premiums expected to nearly double by 2040. The report also highlights a decrease in market concentration as competition intensifies.
The report identifies the disaggregation of the insurance value chain as a key efficiency driver. Brokers and managing general agents are playing a larger role in distribution and underwriting, enabling insurers to access specialized expertise and achieve scale.
The market is also increasingly using alternative risk solutions to address rising exposures, especially in catastrophe-prone areas. Captive insurers now account for an estimated US$60 billion to US$80 billion in global premiums, allowing companies to self-insure frequent risks while relying on reinsurance for peak exposures.
In 2024, the US P&C industry recorded its first underwriting profit since 2020, with net underwriting gains reaching US$22.9 billion, according to AM Best. This turnaround followed several years of losses driven by elevated catastrophe claims and inflationary pressures.
The industry also surpassed US$1 trillion in direct premiums written for the first time, a milestone attributed to the recovery in personal lines, particularly private passenger auto insurers, who posted a US$14 billion underwriting profit after a US$17 billion loss the previous year.
Public, private, and public-private insurance pools, including mechanisms like FAIR and wind pools in the US, are supporting availability in regions where volatility or loss experience would otherwise limit supply.
Gianfranco Lot (pictured above, right), Swiss Re’s chief underwriting officer for P&C reinsurance, commented that the market’s growth demonstrates its ability to manage a complex risk landscape. He said the adoption of artificial intelligence in underwriting could shift the industry toward data-driven global insurers and agile specialists, while the trend of transferring more risk to reinsurers is expected to continue.
Advances in risk modeling are cited as a key factor in supporting the industry’s disaggregated model, enabling more effective valuation and transfer of risk. The growth of wholesale brokers is also contributing to this trend.
The sustainability of the recent increase in smaller market participants will depend on pricing, wholesale appetite, and regulatory tolerance for capital-light models, according to the report.
In advanced markets, personal and commercial P&C premiums have nearly doubled since 2004, with property insurance outpacing other segments due to rising exposures and the spread of catastrophe schemes.
Commercial liability lines in the US have shifted to higher growth rates since 2019, driven by litigation inflation. On the personal side, property and niche products have offset a declining share for motor insurance, reflecting higher claims for property losses.
Swiss Re Institute expects these trends to persist, with both property and liability lines expanding at similar rates. In emerging markets, the split between commercial (46%) and personal (54%) lines is projected to remain steady, with commercial growth fueled by expanding corporate exposures and personal lines supported by increased motor insurance penetration.
Emerging markets currently represent 20% of global P&C premiums, a share that has remained unchanged since 2014, but Swiss Re Institute suggests this could rise as technical capabilities improve.
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