Captive Insurance Reaches $60 Billion–$80 Billion as Global P&C Market Expands

Swiss Re Institute's latest sigma report, "Growing stronger: How the Property & Casualty market adapts to a riskier world," highlights that the global property-casualty (P&C) insurance market has doubled in size over the past 2 decades, reaching $2.4 trillion in premiums. According to Swiss Re, this growth reflects increased efficiency, broader access to coverage, and enhanced resilience in the face of mounting global risks.

Per the report, global P&C premiums are expected to grow broadly in line with gross domestic product over the next decade, driven by factors such as natural catastrophe losses, asset accumulation, and inflation in both economic and liability claims. The study forecasts that total P&C premiums could nearly double again by 2040.

According to Swiss Re, the industry's value chain is undergoing significant disaggregation, with brokers and managing general agents playing a larger role in distribution and underwriting. This shift allows insurers to leverage specialized expertise and scale, though it also raises oversight challenges. In the United States, efficiency gains over the past decade have been offset in part by higher commissions, reflecting the growing importance of intermediaries.

Alternative risk solutions, such as captive insurance, pools, and residual market mechanisms, have become increasingly important for sustaining availability in high-risk segments. Swiss Re said captives alone represent an estimated $60 billion to $80 billion in global premiums, enabling corporations to self-insure frequent losses while accessing reinsurance for peak exposures. Public and private pools, as well as mechanisms like fair access to insurance requirements and wind pools in the United States, also play a stabilizing role.

Reinsurance and retrocession continue to expand their role in the risk-transfer chain. According to the report, reinsurance premiums have grown at a 7 percent compound annual rate over the past decade, outpacing primary P&C growth at 4.2 percent. This layered transfer system—spanning from primary insurers to reinsurers and then to alternative-capital-backed retrocession—has bolstered capital efficiency while introducing new dependencies on capital markets.

Swiss Re noted that regional dynamics vary across markets. In advanced economies, property and liability lines have grown most rapidly, with liability inflation in the United States acting as a key driver of demand. On the personal side, property insurance has offset declining motor share. In emerging markets, commercial lines are projected to grow at a faster pace than personal lines, supported by expanding corporate exposures and increasing motor penetration.

According to Swiss Re, the global P&C market's evolution reflects both resilience and adaptation. A more distributed risk-transfer system, broader participation of alternative carriers, and the integration of technology and risk modeling are enabling insurers to manage a more complex and uncertain risk landscape.