Useful Information

According to Global Reinsurance Market Report 2022, The global reinsurance market is expected to grow from $503.73 billion in 2021 to $558.09 billion in 2022 at a compound annual growth rate (CAGR) of 10.8%. The market is expected to grow to $812.37 billion in 2026 at a compound annual growth rate (CAGR) of 9.8%.

The main types of reinsurance are property and casualty reinsurance, and life and health reinsurance. The majority of insurers offer their services both online and offline to both local and international organizations. The various distribution channels used are direct underwriting and brokerage.

Western Europe is the largest market for the reinsurance business in 2021, followed by the Asia Pacific. The report covers the following regions: Western Europe, Eastern Europe, Asia-Pacific, North America, South America, the Middle East, and Africa.

Reinsurance providers are integrating blockchain technology into their claims processing and risk assessment processes to increase transparency, reduce costs, increase efficiency, and improve the security of customer data and other financial transactions. Blockchain is a large, decentralized, distributed ledger among many people, such as a shared database (which can be stored, owned, or updated at different levels), not managed by a central authority, enabling secure, authenticated, and checkable transactions. It will be able to decrease processing time and transaction costs, improve compliance, prevent re-entries, claims leakage, and fraud, reduce loss settlement time, and provide cryptographic security. It is estimated that blockchain technology could reduce costs for reinsurance companies by more than $5 billion globally.

Reinsurers are beginning to offer bundled products and services to boost their revenues. This shift has occurred because of the wide range of choices, competitive pricing, and broader coverage offered by reinsurers to gain more global market share by reducing their process costs.

• What is Reinsurance?Reinsurance is also known as insurance for insurers or stop-loss insurance. Reinsurance is the practice whereby insurers transfer portions of their risk portfolios to other parties by some form of agreement to reduce the likelihood of paying a large obligation resulting from an insurance claim.The party that diversifies its insurance portfolio is known as the ceding party. The party that accepts a portion of the potential obligation in exchange for a share of the insurance premium is known as the reinsurer.(From Investopedia.com)
• Explaining the process
  A significant insurance practice is that of reinsurance, whereby risk may be divided among several insurers, reducing the exposure to loss faced by each insurer. Reinsurance is effected through contracts called treaties, which specify how the premiums and losses will be shared by participating insurers.Two main types of treaties exist—pro rata and excess-of-loss treaties. In the former, all premiums and losses may be divided according to stated percentages. In the latter, the originating insurer accepts the risk of loss up to a stated amount, while any sums above this, reinsurers will share. Reinsurance is also frequently arranged on an individual basis, called facultative reinsurance, under which originating insurer contracts with another insurer to accept part of, or the entirety of a specific risk.Reinsurance enlarges the ability of an originating insurer to accept risk, since unwanted portions of the risk can be passed on to others. Reinsurance stabilizes insurer profits, evens out loss ratios, reduces the capital needed to underwrite business, and offers a way for insurers to divest themselves of an entire segment of their risk portfolio.(From Britannica.com)