Joy Agwunobi
The global reinsurance insurance industry is entering a new phase of expansion, yet beneath the surface of growth lies a fundamental shift that could redefine how insurers and reinsurers operate in the decade ahead.
This is according to new research by professional services firm PwC, titled “Reinsurance 2035: Rethinking the Risk Business,” which examines how climate change, technology, and capital flows are transforming the global risk landscape.
According to PwC’s analysis, total global insurance premiums grew by 8.6 percent in 2024 to €7.0 trillion—the fastest annual growth rate since before the global financial crisis. The expansion was driven by strong performance across life, non-life, and health insurance segments. Reinsurers also delivered some of their best results in a decade, with combined ratios among key industry players dropping to 86.8 percent and average return on equity reaching 17 percent, well above the cost of capital.
Despite these strong figures, PwC’s report warns that the industry’s resilience is being tested by deeper structural challenges. The pandemic revealed vulnerabilities in health and liability systems, while monetary tightening reshaped solvency frameworks and capital allocation models. More recently, the increasing frequency and severity of climate-related catastrophes from Canadian wildfires to Brazilian floods have exposed the limitations of traditional risk modelling.
Beyond the long-discussed $1.83 trillion global protection gap, the report identifies three emerging shortfalls—the resilience gap, the talent gap, and the funding gap—that threaten the industry’s capacity to serve an increasingly complex and interconnected world.
PwC’s analysis suggests that reinsurers must adopt a dual approach: strengthen core competencies such as risk selection, pricing, and capital management, while simultaneously reimagining their role within a rapidly evolving global economy.
“In a world shaped by climate change, technological disruption, and volatile geopolitics, the role of reinsurers is shifting from being mere backstops for losses to facilitators of resilience, prediction, and prevention,” the report notes. “Investment in advanced data analytics, digital platforms, and ecosystem partnerships will define the winners of the next decade.”
The report also explores how reinsurance is becoming deeply intertwined with other economic domains. PwC forecasts that by 2035, the Fund and Insure sector representing the financial backbone for managing risk, capital, and transactions will generate $17.04 trillion in gross value added (GVA).
This domain serves as the foundation for several other growth sectors, including Move covering transport and energy systems—which is projected to generate $5.86 trillion in gross value added (GVA). It also supports Care, encompassing healthcare and life sciences, expected to surpass $9.31 trillion in GVA, and Fuel and Power, a sector tied to the global shift toward electrification, which is forecast to reach $6.19 trillion in GVA.
As capital increasingly flows into new reinsurance vehicles—such as insurance-linked securities (ILS), catastrophe bonds, and sidecars—PwC estimates that roughly $115 billion, nearly one-fifth of global reinsurance capacity, now comes from alternative sources including pension funds, sovereign wealth funds, and asset managers. This diversification, the report says, is opening up access to reinsurance markets through clearer regulation and smarter digital platforms.
However, transformation pressures are intensifying across the financial services sector. PwC’s Business Model Resilience (BMR) Pressure Index—which tracks stress signals across industries—projects that $604 billion in enterprise value could change hands within financial services in 2025 as companies restructure to remain competitive. The insurance sector, in particular, is experiencing its second-highest level of transformation pressure in 25 years, underscoring the urgency for strategic reinvention.
Arthur Wightman, territory and insurance leader at PwC Bermuda and a contributor to the report, emphasised that the decade ahead will reshape how insurance capital supports the global economy.
“The next decade will redefine how we fund and insure the world’s most critical industries,” Wightman said, adding “The future of re/insurance lies in its ability to orchestrate, not just underwrite, resilience—empowering businesses to thrive amid complexity as megatrends like climate change and technological disruption reshape industries.”
Matt Britten, Partner at PwC Bermuda and co-author of the report, added that the industry must urgently address four structural gaps to remain viable.
“Our report identifies four urgent gaps that threaten the industry’s ability to manage increasingly complex risks,the protection gap, the resilience gap in systems, the talent gap in emerging capabilities, and the funding gap for climate and transition-linked risks,” Britten noted. “Addressing these is as critical as managing today’s underwriting and pricing challenges.”
Ultimately, PwC emphasises that reinsurance is no longer just about absorbing shocks, it is about enabling transformation. The firms that will lead by 2035, the report notes, are those that embrace predictive analytics, forge new technology alliances, and re-skill their workforces to serve a risk environment defined by constant change.
