Global reinsurance, a growing market

In 2011, only 4.18% out of the 4 597 billion USD of direct premiums were reinsured: 8% for non-life insurance and 2.2% for life.

As far as direct insurance is concerned, the non-life business accounts for only 43% of the overall premiums volume whereas in reinsurance, this same class accounts for 77% of the premiums volume, that is, 169.4 billion USD.

The structure of the reinsurance market

Reinsurance supply

It is the European reinsurers who monopolize the reinsurance supply worldwide with a market share attaining 59%. Europe, with its three main reinsurance places: Ireland, United Kingdom and Continental Europe, maintains its leadership since 1998, date when it already accounted for 59% of the supply.

However, the role of Continental Europe has slightly decreased from 49% of the market share in 1998 to 47% in 2011. This slight decrease has been offset by the performance of Irish reinsurers whose supply has risen from 2% to 4% during the same period.

Across the Atlantic, the participation of American reinsurers has also dwindled from 26% in 1998 to 21% in 2011. The Bermudans have, however, seen their percentage double from 4% to 8%. A slight growth has been noticed for Asian reinsurers who progress from 8% to 10% between 1998 and 2011.

Geographic breakdown of reinsurance premiums: 2008-2011

Reinsurance demand

Almost half the global reinsurance demand comes from the United States. This country which remains, the number one risk-exporting market, uses up, alone, 47% of the capacities. It is followed by Europe with 38% of the premiums ceded, Asia with 9% and the rest of the world with 6%.

Reinsurance remains in the hands of Europe and North America. Both markets are the main players of reinsurance with 99% of the accepted premiums while the other regions of the world play a marginal role.

It is worth reminding as well that Europe and the United States use up 85% of the ceded premiums worldwide.

Concentration of the reinsurance market

Reinsurance market remains quite concentrated, accounting a hundred professional players operating worldwide. Only a handful of them dominate the business.

In 2011, the first five reinsurers controlled 44% of the market shares, compared to 17% in 1980, while the first ten totaled 58% of the premiums in 2011 against 22% in 1980.

We note, however, the appearance of small actors in the emerging markets such as: Bermudas, Brazil, India, South Korea, etc. Reinsurers in these countries are attempting to set foot on international markets while consolidating their position locally.

Rating evolution of the 25 most important reinsurers

Evolution of the reinsurers’ market shares

Ranking 2011 of the first ten reinsurers per premiums