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Life Reinsurance Market

Life Reinsurance Market

by Type (Facultative Reinsurance, Treaty Reinsurance), by Product (Disease Insurance, Medical Insurance), by Distribution Channel (Direct Writing, Broker): Global Opportunity Analysis and Industry Forecast, 2021-2031

Report Code: A06698
Pages: 378
Jan 2023 | 5258 Views
Author(s) : Kanhaiya K, Sourabh E , Vineet K
Tables: 122
Charts: 61
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Life Reinsurance Market Research, 2031

The global life reinsurance market was valued at $222.1 billion in 2021, and is projected to reach $647.8 billion by 2031, growing at a CAGR of 11.6% from 2022 to 2031.

The COVID-19 outbreak had a negative effect on the life reinsurance industry. The socioeconomic disruptions have accelerated the dynamics of broker, primary insurer, and reinsurer consolidation. This has significantly highlighted the value of new company models in uncovering fresh sources of income.

Reinsurance for life insurance firms allows them to shift all or a portion of their risk to another insurer. It allows life insurance companies to spread their risks, reduce their liabilities, and increase assets. Life reinsurers assume the risks associated with virtually every product sold by life insurers. In addition, the practice of reinsurance helps in keeping premiums low for clients and allowing insurance companies to remain in business when losses are widespread in their area.

The reinsurers have taken several steps to smooth out the earnings of primary insurers since they are eager to provide value-added services to them. From merely addressing property disaster risks to covering a wider range of hazards, the focus has significantly shifted. In addition, growth in awareness for health protection is a major factor expected to drive the life reinsurance market growth. However, frail economies, with resultant low insurance infiltration due to lack of disposable income, and globalization & competition from foreign companies, are expected to hinder the growth of the market. On the contrary, digitalization in life reinsurance companies is expected to fuel the expansion of the market in future. Moreover, increase in opting for conduit life reinsurance by leading sectors is expected to create lucrative opportunities for the market to grow in upcoming years.

The report focuses on growth prospects, restraints, and trends of the life reinsurance market. The study provides Porter’s five forces analysis to understand the impact of various factors, such as bargaining power of suppliers; competitive intensity of competitors; threat of new entrants; threat of substitutes; and bargaining power of buyers on the life reinsurance market outlook.

Life Reinsurance Market

The life reinsurance market is segmented into Type, Product and Distribution Channel.

Segment Review

The life reinsurance market is segmented into type, product, distribution channel, and region. By type, the market is differentiated into facultative reinsurance and treaty reinsurance. Depending on product, it is fragmented into disease insurance and medical insurance. The distribution channel segment is segregated into direct writing and brokers. Region-wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Life Reinsurance Market
By Type

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Treaty reinsurance segment accounted for the highest market share in 2021.

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By type, treaty reinsurance segment accounted for the highest share in life reinsurance market size in 2021. This is attributed to the fact that risks are less likely to be mitigated and treaty reinsurance is less transactional. Furthermore, the lack of individual underwriting on the part of the assuming insurer is the main feature of a treaty arrangement.

Life Reinsurance Market
By Region

2031
North America 
Europe
Asia-Pacific
LAMEA

North America accounted for the highest market share in 2021.

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Region-wise, North America dominated the life reinsurance market share in 2021. It is attributed to the fact that the increase in demand in artificial intelligence and technologies in life reinsurance in emerging the overall life reinsurance market. Moreover, rise in awareness about the insurance products in North America and rise of life reinsurance broker in the region are affecting the life reinsurance market.

Key players operating in the global life reinsurance market analysis include AXA XL, Berkshire Hathaway Life Insurance Company, Everest Re Group, Ltd., The Canada Life Assurance Company, Swiss Re, Munich Re, Hannover Re, MAPFRE, RGA Reinsurance Company, and PartnerRe. These players have adopted various strategies to increase their market penetration and strengthen their position in the life reinsurance industry. 

 

Market Landscape & Trends

One of the key factors propelling the life reinsurance market share is increasing technology sharing and partnerships among the key players. For instance, in August 2022, Ageas Federal Life has adopted the cloud-based underwriting system ALLFINANZ SPARK from Munich Re Automation Solutions Ltd, a leading insurtech specialist and subsidiary of Munich Re, to enhance its customers' purchasing experiences. Ageas Federal Life's switch to SPARK will enable the firm to increase its straight-through processing to 85%, providing best-in-class customer service. This decision was largely motivated by the need to automate core activities in an environment that is becoming more competitive.

Furthermore, several key players in life reinsurance are partnering to acquire major assets an increase the penetration of funds in the organization. For instance, in October 2022, Blackstone Inc. partnered with the insurance provider Resolution Life in a transaction that would eventually add more than $60 billion in new assets for the investment firm to handle. Blackstone had put $500 million into privately owned Resolution Life and helped it finance around $2.5 billion more, giving the insurance business additional ability to buy fresh blocks of policies in the reinsurance and life-and-annuities sectors.

The COVID-19 outbreak had a negative effect on the life reinsurance industry. The socioeconomic disruptions have accelerated the dynamics of broker, primary insurer, and reinsurer consolidation. This has significantly highlighted the value of new company models in uncovering fresh sources of income. In addition, the digitalization of the life reinsurance industry has limited the negative impact of the pandemic. Additionally, future scenarios in the life reinsurance industry indicate that technology will be more important in addressing clients' demands in the post-pandemic era.

 

Top Impacting Factors

Helps insurance companies acquire more clients

Life reinsurance is mainly useful for guarding against insolvency for businesses. It guarantees that insurance providers have the financial means to pay all valid claims made by their customers. This fortifies the company's foundation and allows them the assurance to accept greater risk and serve more clients. Moreover, it helps insurers remain solvent by recovering the amounts paid to claimants during an insurance claim. In addition, it protects against catastrophic losses by lowering the net liability for individual risks. Furthermore, life reinsurance increases the insurer's capacity to bear the financial burden during uncommon and significant catastrophes, providing the latter with more protection for its equity and solvency. Additionally, insurers can underwrite policies covering a larger quantity or volume of risk without excessively raising administrative costs to cover their solvency margins. Thus, this factor is propelling the growth of life reinsurance market.

Reduces risks on insurance companies

An insurance firm assumes a significant level of risk when it insures a sizable number of customers on its own. Life reinsurance is a better option to lower that risk since it enables insurers to share part of the risk rather than bear the entire risk alone. In addition, an insurance business can be approached by a person who wants insurance advice. However, a life reinsurance firm can provide insurance companies with reliable insurance guidance when an insurance company wants insurance advice. Moreover, to lower the chance of significant claim payouts, life reinsurance transfers risk to a different firm. This allows the ceding companies to reduce the risk of insolvency and continue their businesses. Thus, this factor is driving the growth of life reinsurance market.  

Controls competition among insurers

Due to their mutual reliance on one another to reduce risk, insurance businesses in the sector have strong relationships with one another. Life reinsurance is therefore beneficial for the insurance industry since it reduces competition and raises staff morale. Additionally, the earnings made by the insurance firm are one of the many aspects of a corporation that life reinsurance stabilizes. The original insurer's earnings, nevertheless, can be severely harmed by large claims if the greater risks are still borne. Hence, the life reinsurance firms maintain a healthy relationship within the insurance firms to aid each other in need. Thus, the fact that life reinsurance controls competition among insurance is fueling the growth of the market.

 

KEY BENEFITS FOR STAKEHOLDERS

  • This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the life reinsurance market forecast from 2021 to 2031 to identify prevailing life reinsurance market opportunity.
  •  In addition to the market research, important drivers, restraints, and opportunities are covered as well.
  • Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders to make profit-oriented business decisions and strengthen their supplier-buyer network.
  • In-depth analysis of the life reinsurance market segmentation assists in determining the prevailing market opportunities.
  • According to their contribution to global market revenue, the major countries in each region are mapped.
  • Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
  • The report includes the analysis of the regional as well as global life reinsurance market trends, key players, market segments, application areas, and market growth strategies.

Life Reinsurance Market Report Highlights

Aspects Details
Market Size By 2031 USD 647.8 billion
Growth Rate CAGR of 11.6%
Forecast period 2021 - 2031
Report Pages 378
Type
  • Facultative Reinsurance
  • Treaty Reinsurance
Product
  • Disease Insurance
  • Medical Insurance
Distribution Channel
  • Direct Writing
  • Broker
By Region
  • North America  (U.S., Canada)
  • Europe  (UK, Germany, France, Italy, Spain, Rest of Europe)
  • Asia-Pacific  (China, Japan, India, Australia, South Korea, Rest of Asia-Pacific)
  • LAMEA  (Latin America, Middle East, Africa)
Key Market Players RGA Reinsurance Company, Everest Re Group, Ltd., Hannover Re, Berkshire Hathaway Life Insurance Company, AXA XL, The Canada Life Assurance Company, MAPFRE, PartnerRe, Swiss Re, Munich Re
 

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Life reinsurance significantly contributes to capital optimization, supports solvency, and improves the effectiveness of risk transfer in the insurance industry. Due to the numerous difficulties insurers have been experiencing owing to shifting market conditions, the most recent life reinsurance solutions have been aiding the growth of the industry. Moreover, to acquire risk protection & distribution and enhance capital, many insurers are turning to the use of various forms of life reinsurance.

During the pandemic, as insurers have been more concerned with controlling their risks, the demand for life reinsurance solutions has increased significantly in several areas. On the contrary, demand has decreased in a few areas where federal governments were active. However, life reinsurance demand has increased significantly owing to the current volatility brought on by the pandemic, which has driven insurers to a desire to protect their books.

The life reinsurance market is supported by the presence of regional vendors such as AXA XL, Berkshire Hathaway Life Insurance Company, Everest Re Group, Ltd., The Canada Life Assurance Company, Swiss Re, Munich Re, Hannover Re, MAPFRE, RGA Reinsurance Company, and PartnerRe. Major players operating in this market have witnessed significant adoption of strategies that include business expansion and partnerships to reduce supply and demand gaps. With increase in awareness & demand for life reinsurance across the globe, major players are collaborating on their product portfolio to provide differentiated and innovative products.

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FREQUENTLY ASKED QUESTIONS?

A. The life reinsurance market is estimated to grow at a CAGR of 11.6% from 2022 to 2031.

A. The life reinsurance market is projected to reach $647.78 billion by 2031.

A. Growth in focus on insurers to stabilize losses by limiting risks, rise in claims in the life insurance sector and expansion of insuring capacity majorly contribute toward the growth of the market.

A. The key players profiled in the report include reinsurance market analysis includes top companies operating in the market such as AXA XL, Berkshire Hathaway Life Insurance Company, Everest Re Group, Ltd., The Canada Life Assurance Company, Swiss Re, Munich Re, Hannover Re, MAPFRE, RGA Reinsurance Company, and PartnerRe.

A. The key growth strategies of life reinsurance market players include product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations.

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