The global property and casualty (P&C) insurance market has doubled in size over the last 20 years, reaching USD 2.4 trillion, according to a new report from Swiss Re Institute. The report notes that innovation over the past two decades has led to broader access to coverage, using both conventional and alternative structures.
Jérôme Jean Haegeli, Swiss Re's Global Chief Economist, stated: “The rapid expansion of the P&C market is not only about scale, but also about greater capability and resilience. Insurers have become more efficient at pricing, managing and transforming risk, supporting capacity even in times of heightened uncertainty. At the same time, insurers are passing on a larger share of the risk to reinsurers. This is a recognition of the demand for risk transfer and a trend that is set to continue given the risk landscape. A key pillar for reinsurers to fulfil their indispensable role as a shock absorber is a strong capital base. Robust reinsurance and alternative risk solutions are further broadening capacity and helping keep protection accessible and affordable in an increasingly uncertain world.”
Swiss Re Institute projects that global P&C premiums will grow at rates similar to global GDP over the next decade. By 2040, total premiums are expected to nearly double again as competition increases and market concentration eases.
A significant factor in efficiency gains has been disaggregation within the industry’s value chain. Brokers and Managing General Agents now play larger roles in distribution and underwriting, allowing insurers to use specialized skills at scale.
Alternative risk solutions have also gained importance alongside traditional insurance offerings, especially where exposures are rising—such as regions prone to natural catastrophes. Captive insurers now account for between USD 60 billion and USD 80 billion in global premiums by enabling companies to self-insure frequent risks while still accessing reinsurance for major exposures.
Public or hybrid insurance pools like FAIR plans or wind pools in the US help maintain coverage availability where volatility might otherwise limit supply.
Gianfranco Lot, Swiss Re's Chief Underwriting Officer P&C Reinsurance said: "The growth of the P&C insurance market is testament to its ability to navigate a complex risk landscape. Looking ahead, the adoption of AI in underwriting could steer the industry towards data-rich global insurers versus nimbler specialists. This shift is accompanied by a structural trend of transferring more risk to reinsurers, who remain a pillar of stability and an enabler of transformation."
Reinsurance premiums have grown faster than primary P&C over the past decade—about 7% compound annual growth rate compared with 4.2%. This layered approach improves capital efficiency but introduces new dependencies on capital markets.
Advances in risk modeling across areas such as natural catastrophe, motor vehicle accidents, liability claims, and cyber risks have supported this model by making it easier for originators with less capital backing them (“capital-light”) to pass risks up through wholesale brokers into full-stack insurers or reinsurers.
In advanced economies since 2004 both personal lines (like auto) and commercial lines almost doubled; property outpaced other sub-lines due partly to mandatory catastrophe schemes but was buffered by inflows from cat bonds (catastrophe bonds) and reinsurance markets rather than facing shortages during high-loss periods. Since 2019 commercial liability lines have seen stronger growth because litigation inflation continues driving claims costs higher—especially notable in US markets.
Personal property products offset declines seen long-term among motor policies—a result attributed mainly to increasing property losses compared with relatively stable auto trends—and both segments are expected by Swiss Re Institute’s analysis to expand at roughly equal rates going forward.
Emerging markets currently make up about one-fifth of all global P&C premium volume; this split between commercial (46%) versus personal (54%) lines is expected not only persist but possibly increase if technical capabilities improve further there according to sigma’s findings.