Global Life Reinsurance Market Highlights

The global life reinsurance market is estimated at USD 273.97 billion in 2024, which is expected to reach USD 860.63 billion at a CAGR of 12.13% during 2024-2034.

Life Reinsurance Market CAGR

2024-2034

CAGR OF

12.13%

Life Reinsurance Market

The life reinsurance industry offers reinsurance for life insurance firms, allowing them to shift the entirety or part of the risks they face to a third-party insurer. This enables life insurance firms to spread the risks they face to contain liabilities and drive up assets. Life reinsurers notably account for risks associated with almost every product provided by life insurers. Additionally, reinsurance helps contain premiums for clients, allowing insurers to continue operations even when losses threaten future business prospects.

The market is thriving due to the assistance it extends to ceding insurers in management of exposure to financial risks relating to life insurance policies, such as mortality risk and longevity risk. This enables insurance firms to optimally utilize resources and promise the performance of their obligations to policyholders. In sum, life reinsurance qualifies as a crucial financial security tool for life insurers.

However, constraints exist for market expansion and the players within. High cost of life reinsurance is a key constraint. Purchase of reinsurance reduces insurers’ insolvency risk via stabilization of losses, expansion of capacity, containment of liability on certain risks, and/or protection against disasters. At the same time, reinsurance costs can rise up to as much as 200% (as during the Ukraine war and extreme weather conditions in January 2023; property catastrophe reinsurance also spiked after Hurricane Ian which struck Florida and South Carolina in 2022), potentially considerably offsetting the potential benefits and warranting (re)evaluation on part of reinsurance purchasers.

Opportunities in the market arise from increased collaboration of life reinsurers with insurtech players. Insurtech companies hold expertise in high-end data analytics by leveraging A.I. and machine learning algorithms. Such collaborations enable life reinsurers to utilize enhanced analytic capabilities for more accurate assessment of risk, modelling of prices, and underwriting of processes. Advancements in analytic capabilities enable sophisticated decision-making and promise data-powered insights into emerging trends.

Life Reinsurance Market

By Type

Facultative Reinsurance

Treaty Reinsurance

The Market will Grow

At the CAGR of:

12.13%

The Forecast Market

Size for 2034 in USD:

$860.63B

Challenges for market expansion and the players within include low interest rates, lower returns, and an increasingly convoluted regulatory set-up. Popularity of savings products (such as in Asia) also qualify as a challenge for the industry’s expansion in affected region. The regulatory set-ups across the globe vary to a challenging extent, posing especial issues when certain countries restrict external players. Additionally, market expansion is contained when faced with small (in absolute and/or relative terms) markets, with the confrontation resulting in insufficiency of data for underwriting risk.

The life reinsurance market is experiencing a digital glow-up through integration of insurtech solutions. Insurtech companies help streamline processes, enhance customer experiences, and introduce innovative technological advancements such as A.I., blockchain, and data analytics. Consequently, collaborations between life reinsurers and insurtech companies are proving crucial to retaining technological competitiveness. Moreover, life reinsurers are actively developing solutions for management of longevity risk, such as longevity swap arrangements and innovative pension risk transfer products.

Several investments/partnerships/launches in the life reinsurance market have been directed in recent years, which would boost the overall life reinsurance market. Some of them are:
•    In January 2024, Reinsurance Group of America, Incorporated (RGA), a leader in global life and health reinsurance, strategically invested in and exclusively partnered with DigitalOwl, an insurance tech company. 
•    In December 2023, RGA launched Missouri-domiciled third-party life reinsurance company, Ruby Reinsurance Company (Ruby Re), aimed at U.S. asset-intensive business. 
•    In September 2023, Nomura invested USD 1 billion in Prismic Life Reinsurance, a Bermuda-based life and annuity reinsurance company. Prismic Life Reinsurance aims to channel the investment towards further capitalizing its operations.

Life Reinsurance Market Segments’ Analysis

The life reinsurance market is divided into type-, product offering-, and region-based segments.

Based on type, the market is further segmented into Facultative Reinsurance and Treaty Reinsurance.
The facultative reinsurance sub-segment is expected to grow at a dominant CAGR over the forecast period, owing to facultative reinsurance’s accurate risk assessment due to accelerated advancements in data analytics and underwriting technologies. Facultative reinsurance is reinsurance purchased by an insurer for a single risk or a defined set of risks. These transactions tend to be one-off, and are performed whenever the reinsurance company conducts its own underwriting for a subset of or all the policies to be reinsured.

Life Reinsurance Market

By Product Offering

XX%

Mortality Solutions

Morbidity Solutions

Longevity Solutions

Others

273.97

Total Market Size

USD (Billion), 2024

12.13%

CAGR

2024 - 2034

Based on product offering, the market is further segmented into Mortality Solutions, Morbidity Solutions, Longevity Solutions, and Others.
Digital technology advancements potentially significantly truncate the timeline of policy issuance via links to third party data. Data protection compliance drives willingness of end-customers to share relevant data. Mortality risk pricing has also undergone improvement owing to technological progress, and the consequent availability of and access to highly detailed information. Such advancements notably allow identification of patterns and personal characteristics which may warrant re-evaluation of the risk. In this manner, reinsurers help insurance companies to charge more tailored prices, and potentially outperform competition where market pricing is inaccurate.

Life Reinsurance Market Regional Analysis

Geographically, the life reinsurance market is present across regions such as North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa.

Life Reinsurance Market

By Region

The Market will Grow

At the CAGR of:

12.13%

The Forecast Market

Size for 2034 in USD:

$860.63B

The North American life reinsurance market dominates the rest in terms of market share owing to reassessment of risk management strategies undertaken by insurers and reinsurers in the North American region. Active contingency planning exercises are informing innovative solutions aimed at future systemic risks. Furthermore, leveling out of cessation rates (and consequent market stabilization) has been a favorable factor. Increased retention by direct insurers, availability of alternative collateral to back reinsurance, and rising regulatory requirements for captive reinsurance, have all contributed. Long-run growth potential is present in the North American longevity reinsurance market owing to its relative under-penetration.

Life Reinsurance Market Key Players

The global life reinsurance market features highly concentrated competition. The mortality market, in particular, presents sizeable barriers to entry for upcoming companies. Already established global players have access to considerable capital, strategic market positions, and economies of scale, enabling compliance with strict regulations and crucial long-term investments.

In recent years, the market has witnessed several merger and acquisition deals and agreements as companies strive to expand their product portfolios, geographical reach, and market share. For instance:
•    In May 2024, Brookfield Reinsurance, a capital solutions reinsurer, concluded its acquisition of American Equity Investment Life Holding Company (AEL). The strategic deal will help expand Brookfield Reinsurance’s operations.
•    In December 2021, Allianz Life entered a reinsurance agreement with affiliates of Sixth Street (including Talcott Resolution Life Insurance Company and Resolution Life) for its USD 35 billion-worth fixed index annuity portfolio, with the transaction unlocking USD 4.1 billion in value and freeing up regulatory capital for Allianz.

The prominent players in this market are Hannover Re, Munich Re, The Canada Life Assurance Company, Liberty Mutual Reinsurance, AXA XL, RGA Reinsurance Company, Everest Group, Ltd., Swiss Re, Sampo International Holdings Ltd., and Berkshire Hathaway Life. 

Life Reinsurance Market Scope: