Global P&C premiums to more than double by 2040

Global property & casualty insurance premiums expected to more than double to USD 4.3 trillion by 2040, Swiss Re Institute forecasts

  • Property & casualty (P&C) business to become riskier and more complex; opportunities in fundamental shift from lower-risk, high-volume motor insurance to catastrophe-exposed property lines
  • Property to be fastest growing P&C line, with premiums set to almost triple to USD 1.3 trillion in 2040 from USD 450 billion in 2020, driven by effects of economic development and climate change
  • Motor remains largest line of P&C business, with premiums expected to almost double to up to USD 1.4 trillion by 2040

Geneva, Switzerland (Sept. 6, 2021) – Global P&C premiums are expected to more than double to USD 4.3 trillion in 2040 from USD 1.8 trillion in 2020, as the P&C portfolio composition is expected to shift from lower-risk motor insurance towards higher-risk property and liability lines, according to Swiss Re Institute’s sigma study, More risk: the changing nature of P&C insurance opportunities to 2040. Property insurance is forecast to become the fastest growing line of business. Motor, although its share is shrinking, is expected to remain the largest of all P&C lines, with premiums forecast to almost double by 2040.

Property insurance is forecast to grow by 5.3% annually with global insurance premiums rising to USD 1.3 trillion in 2040 from USD 450 billion in 2020. Economic development will remain the key driver of rising property premiums, contributing 75%, or up to USD 616 billion of new premiums. Climate-related risks are expected to result in a 22% increase in global property premiums, or up to USD 183 billion, over the next 20 years as weather-related catastrophes will likely become both more intense and frequent.

Jerome Haegeli, Swiss Re’s Group Chief Economist, said: “Promoting the conditions for long-term sustainable growth is particularly important in the face of climate change, which poses the biggest long-term threat to the global economy. If we are to build a sustainable insurance system that allows society to manage and absorb future risks, we need to make risks and opportunities quantifiable. Our work is also vital for policy makers with whom we share the aim of making economic growth insurable.”

As social inflation is expected to drive up the frequency of large verdicts and settlements, especially in the US, liability premiums are forecast to grow by 4.7% per year on average to USD 583 billion until 2040 from USD 214 billion in 2020. Additional areas of long-term growth potential in liability come from climate change effects, artificial intelligence, and social and legal changes.

Motor will remain the largest line of business
As the more volatile property and liability segments are gaining in significance, the share of motor insurance, traditionally a lower-risk and high-volume mainstay segment of P&C, will shrink due to safety improvements from automation and smart technology and a drop in associated claims. While the share in the P&C risk pool is expected to shrink to 32% of sector premiums by 2040 from 42% in 2020, motor will remain the largest line of business, with premiums forecast to almost double up to USD 1.4 trillion by 2040 from USD 766 billion in 2020.

Gianfranco Lot, Head Globals Reinsurance at Swiss Re, said: “With the global portfolio shifting from lower risk motor insurance to higher risk lines, P&C insurance business will become more volatile. At the same time, risk modelling will become more complex, which will lead to higher capital requirements and an increased demand for reinsurance. In this fundamentally different risk environment, reinsurers will play a crucial role in keeping risks insurable.”

Notes to editors

Growth rates: Property fastest growing line, followed by liability. Technological developments to cap growth in motor, partially offsetting positive impact of other socio-economic forces.

Motor Property Liability Other Total
Risk pool 2020 (USD bn) 766 450 214 378 1,808
   % of total 42% 25% 12% 21% 100%
Risk pool 2040 (USD bn) 1,402* 1,273* 583 1,059 4,316
  % of total 32% 29% 13% 25% 100%

Note: * Motor and property risk pool 2040 projections shown are upper bound of forecast range

Main growth drivers: Economic development will remain the key driver of premium growth across all lines of business over the next 20 years. In property, climate risks will raise property claims and premiums

Motor Property Liability Other Total
Increase in premiums
(USD bn) by 2040
635 823 369 681 2,508
Contribution by driver:
Economic development 194% 75% 100% 100% 116%
Urbanisation na* 3% na na 1%
Climate change na 22% na na 7%
Technology & sustainability -94% na na na -24%

*na = implicit quantification only

How to order this sigma study

The English version of the sigma 4/2021, “More risk: the changing nature of P&C insurance opportunities to 2040“, is available in electronic format. You can download it here

About Swiss Re

The Swiss Re Group is one of the world’s leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, working to make the world more resilient. It anticipates and manages risk – from natural catastrophes to climate change, from ageing populations to cybercrime. The aim of the Swiss Re Group is to enable society to thrive and progress, creating new opportunities and solutions for its clients. Headquartered in Zurich, Switzerland, where it was founded in 1863, the Swiss Re Group operates through a network of around 80 offices globally. For more information, please visit

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SOURCE: Swiss Re

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