Global property and casualty premiums are expected to grow in line with GDP over the next decade, driven by rising natural catastrophe losses, asset accumulation, and economic and litigation claims inflation, Swiss Re Institute says in a report.

Swiss Re sees market concentration easing as competition increases, while brokers and managing general agents are taking on a greater role in distribution and underwriting, allowing insurers to tap into specialist skills and scale.

The global P&C market has doubled over the past 20 years to $US2.4 trillion ($3.6 trillion) as innovation results in broader access to coverage through conventional and alternative structures, and it could reach $US4.3 trillion ($6.5 trillion) by 2040, the report says.

Captive insurers represent an estimated $US60-$US80 billion ($91-$122 billion) in global premium, enabling corporates to self-insure high-frequency risks while using reinsurance capacity for peak exposures.

Public, private or public-private insurance pools and market mechanisms such as US fair access programs and wind pools are playing a growing role creating availability where volatility or loss experience would otherwise constrain supply, Swiss Re says. 

The reinsurer’s group chief economist, Jerome Jean Haegeli, says insurers have become more efficient at pricing, managing and transforming risk, supporting capacity even amid heightened uncertainty.

“At the same time, insurers are passing on a larger share of the risk to reinsurers,” he said. “This is a recognition of the demand for risk transfer and a trend that is set to continue given the risk landscape.”

Reinsurance premiums have grown at a compound annual rate of about 7% over the past decade, compared with 4.2% for primary P&C insurance.

The Sigma report – titled Growing Stronger: How the Property and Casualty Market Adapts to a Riskier World – was released as the industry gathered for the annual Reinsurance Rendezvous in Monte Carlo.

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