Global Specialty Insurance Market Flourishes at a CAGR of 9.3%

Introduction

Specialty insurance offers coverages for more risky accounts and odd, challenging, and unique insurance needs. One of the main risks covered by specialty insurance is the unplanned postponement of a wedding, vacation cancellation, identity theft, and theft of valuables like jewelry, collectibles, or firearms. Some examples of specialized insurance are cyber liability insurance, errors and omissions insurance, business umbrella insurance, and directors and officers liability insurance.

Additionally, the prices for this insurance are determined by the industry, risk factors, and level of coverage for a specific need.Specialty insurance can cover both admitted and non-admitted products and insure against various business lines' specific risks. With a great deal of flexibility in terms of coverages, policy term, and policy duration, it offers a variety of coverage possibilities. Additionally, the industry is driven by increased demand for specialist knowledge and technological improvements.

Market Dynamics

Benefits Associated with Specialty Insurance Propels its Demand in the Market

With the ability to provide both admitted and non-admitted products, specialty insurance covers niche and unique perils across a wide range of business lines. It offers multiple coverage options with tremendous flexibility in terms of coverages, policy term, and policy period. Moreover, due to the COVID-19 pandemic, several business lines such as directors andofficers liability insurance (D&O) and errors and omissions insurance (E&O) have led to the massive demand for customized coverages in specialty insurance. In addition, businesses expect a rapid re-evaluation of risk portfolios that cover their unique needs and preferences. Therefore, numerous benefits provided by specialty insurance in terms of enormous flexibility and surrounding niche business lines are driving the market growth.

Untapped Potential of Emerging Economies Create New Opportunities for the Global Specialty Insurance Market

Developing economies offer significant opportunities for specialty insurance providers to expand their offerings, as several businesses are adopting new business models. Thus, demand for niche and customized specialty insurance continues to rise globally. In the upcoming years, there is expected to be significant growth potential for the specialty insurance market due to high investments in digital transformation, adoption of new technologies like artificial intelligence, analytics, big data, machine learning, and chatbots, and the rapid expansion of domestic business, particularly among nations like Singapore, Hong Kong, China, and South Korea. As a result, emerging economies across Asia-Pacific are expected to offer the remunerative opportunity for expanding the global market in upcoming years.

Regional Insights

Europe holds the highest market share and is estimated to grow at a CAGR of 8.9% during the forecast period. The increase in usage of chatbots and voice assistants' platforms for assisting businesses and individuals demanding specialty insurance has become one of the significant trends in the market. The specialty insurance market is expected to grow significantly with customized coverages and flexibility in choosing coverages.

Asia-Pacific is the fastest-growing region. Insurers in Asia-Pacific are providing unparalleled underwriting expertise and conducting several programs to grow the specialty insurance market. Continuous growth in corporates and small & medium enterprises demanding customized coverages is further boosting the growth of the specialty insurance market in the region. Moreover, the Insurance Regulatory and Development Authority of India (IRDAI) created a protection and indemnity (P&I) club in the Indian marine, aviation, & transport sector in 2021. The regulators have collaborated with the Indian National Ship Owners Association (INSA) regarding the move, which boosts the growth of the specialty insurance market in the country.

North America is the second largest region. It is projected to reach USD 53,646 million by 2030, growing at a CAGR of 8.1% during the forecast period. Specialty insurance is adopted mainly by corporations, professional firms, and financial institutions across the US, which has become a significant trend in the market. Moreover, insurance programs are conducted by insurers to meet the needs of business segments with unique risk profiles, and the market has experienced a rapid increase in demand for both comprehensive and custom-designed specialty insurance. This, as a result, is accelerating the market growth in this region. 

Key Highlights

• The global specialty insurance market was valued at USD 80,815 million in 2021. It is projected to reach USD 178,522 million by 2030, growing at a CAGR of 9.3% during the forecast period (2022–2030).
• Based on type, the global specialty insurance market is segregated into Marine, Aviation, & Transport (MAT), Political Risk & Credit Insurance, Entertainment Insurance, Art Insurance, Livestock & Aquaculture Insurance, and Others.The Marine, Aviation, & Transport (MAT) insurance segment is the highest contributor to the market and is estimated to grow at a CAGR of 8.3% during the forecast period.
• Based on the distribution channel, the global specialty insurance market is bifurcated into Brokers and Non-Brokers. The Broker's segment is the highest contributor to the market and is estimated to grow at a CAGR of 9.4% during the forecast period.
• Based on end-user, the global specialty insurance market is divided into Businesses and Individuals. The Business segment was the highest contributor to the market and is estimated to grow at a CAGR of 8.8% during the forecast period.
• Based on regions, the global specialty insurance market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. Europe is the highest revenue contributor and is estimated to grow at a CAGR of 8.9% during the forecast period.

Competitive Players

1. AXA
2. American International Group, Inc.
3. Allianz
4. ASSICURAZIONI GENERALI S.P.A
5. Berkshire Hathaway Inc.
6. Chubb
7. Munich Re
8. PICC
9. Tokio Marine HCC, and Zurich

Recent Developments

Recent Developments

• June 2022 - Zurich Insurance Group (Zurich) has agreed to sell its legacy traditional life insurance back book in Germany to Viridium Holding AG (Viridium), a leading specialist in managing life insurance portfolios.
• June 2022 - Zurich Insurance Group (Zurich) is digitalizing its International Programs business using state-of-the-art technology to streamline stakeholder interaction globally. The transformation of the Group's International Programs workflows will significantly enhance the customer and broker experience and allow for a more efficient, seamless, and sustainable collaboration. 

 

Segmentation

1. By Type
   1. Marine, Aviation, & Transport (MAT)
   2. Political Risk & Credit Insurance
   3. Entertainment Insurance
   4. Art Insurance
   5. Livestock & Aquaculture Insurance
   6. Others
2. By Distribution Channel
   1. Brokers
   2. Non-Brokers
3. By End-User
   1. Business
   2. Individuals