Reinsurance Carriers in the US Industry Market Research Report from IBISWorld Has Been Updated

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During the past five years, the Reinsurance Carriers industry battled with decreasing investment income and spiking claims from natural disasters and other catastrophes, but with the economic recovery on the horizon, operators will benefit from increased investment income and improved financial markets over the next five years. For these reasons, industry research firm IBISWorld has updated a report on the Reinsurance Carriers industry in its growing industry report collection.

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Reinsurers will benefit from increased investment income and improved financial markets

Over the past five years, the Reinsurance Carriers industry has grappled with the increasing frequency of natural disasters and the largest financial collapse since the Great Depression. However, reinsurers remained resilient through much of the recent storm. Industry operators maintained better underwriting discipline, grew their capital levels and increased investment income, or revenue from assets rather than operations, to cover underwriting losses. Additionally, foreign reinsurers have assisted by capturing an estimated 68.0% of US reinsurance demand. While the increasing globalization of reinsurance stagnated domestic industry growth, it also improved the Reinsurance Carriers industry's ability to handle major catastrophes, as US losses are spread globally over a larger and more diversified capital base.

IBISWorld estimates revenue, measured as net premiums underwritten plus investment income, has increased at an average annual rate of 2.5% to $39.7 billion in the five years to 2013. According to IBISWorld Industry Analyst Leah Goddard, “The subprime mortgage crisis that began in 2007 led to large losses in industry investment income and profit.” The subsequent recession in 2008 and 2009 also led to dramatic declines in business activity, which hurt growth in industry premiums, and capital levels needed to insure new risks. Since 2009, the industry has faced a choppy recovery through growth in investment income and a small rise in premiums underwritten. Revenue is projected to increase 1.3% in 2013 due to higher demand from downstream primary insurance markets, but weak investment income growth will partially offset industry growth.

“In the early part of the next five-year period, the industry will benefit from capacity growth in direct insurance markets, which will boost demand for reinsurance on these new policies,” says Goddard. Global climate change will also push direct insurers to purchase or renew reinsurance to cover large protections in high weather-risk geographical areas. In addition, the industry will benefit from recovering financial markets, which will drive up industry investment income. In order to meet the capital needs of direct insurers, smaller operators will merge with other reinsurers or be acquired by larger players.

The Reinsurance Carriers industry exhibits a medium level of concentration. The industry's concentration is expected to increase over the outlook period as industry operators consolidate to build capital levels to meet higher demand from downstream primary insurance markets. US reinsurers rely on foreign participants to manage risk because the US market does not have enough capacity to effectively reinsure all of its risks. Additionally, offshore companies are utilized by domestic companies to reduce geographical risks.

For more information, visit IBISWorld’s Reinsurance Carriers industry
in the US industry report page.

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IBISWorld industry Report Key Topics

Companies in the Reinsurance Carriers industry specialize in assuming all or part of the risk associated with existing insurance policies originally underwritten by other insurance carriers. In other words, the primary business of participants in this industry is insuring insurance companies.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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Gavin Smith
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