The Global Specialty Insurance Market Anticipated to Generate a Revenue of $243.70 Billion, Growing at a CAGR of 7.6% from 2021 to 2028Download Sample Reports Overview
The global specialty insurance market size is estimated to be valued at $243.70 billion by 2028, surging from $133.64 billion in 2020, at a CAGR of 7.6%.
COVID-19 Impact on the Specialty Insurance Market
During the COVID-19 pandemic, the global specialty insurance market share is projected to be negatively impacted. Various insurance brokerage firms in emerging countries like India and Japan have closed due to a drop-in client demand for insurance. The business of insurance market has risen dramatically in recent years, but it has been predicted that it might face a modest fall in 2021 as a result of the COVID-19 pandemic. This is due to the implementation of curfews by government agencies in most countries, as well as a rise in insurance prices.
Global Specialty Insurance Market Analysis
The demand for specialist expertise in specialty insurance products has increased, since it provides both comprehensive and custom-designed coverage to satisfy the demands of business segments with unique risk profiles. In addition, program administrators (PAs), one of the largest specialty insurance distributors, play an important role in the industry. These administrators serve as specialist experts who are tasked with determining the exposures of the target market. Furthermore, a growing number of specialized insurers, brokers, and policyholders rely on this expertise to supply narrow specialty coverages in the market.
Misconceptions and a lack of specialty insurance awareness among businesses are two factors that are hindering market expansion. Agent commissions, competitive pricing based on coverages, and the necessity for a new policy to cover a company's assets are just a few of the prevalent misconceptions regarding specialty insurance. Market restrictions also include knowledge of the numerous hazards covered, payback processes, and price transparency for specialty insurance.
The specialty insurance market is set to reach new heights as the technology improves in the insurance industry. Several specialty insurers employ predictive analytics to acquire a lot of information in order to properly understand and forecast organizational risks and losses. The use of technologies is aimed at improving customers' trust and improve the company's value by providing advanced facilities, such as easy and effective insurance policies with reduced premium rates.
Global Specialty Insurance Market, Segmentation
The global specialty insurance market is segmented based on type, distribution channel, end-users, and region.
The type sub-segment is further classified into life insurance and non-life insurance. The non-life insurance sub-segment is anticipated to experience fastest growth in the global market and register a revenue of $43.49 billion, with a CAGR of 8.3% during the forecast period.
Commercial auto insurance, flood insurance, cyber liability insurance, special event insurance and other types of non-life insurance are included. A stronger emphasis on innovation, which is driven by a larger emphasis on customer centricity, is one of the reasons for non-life insurance's constant development. Increasing innovation in the insurance market has been spurred by behavioral changes and preferences of insurance buyers throughout the years. Increasing internet usage, increased social networking, and behavioral alterations connected to increased use of mobile and handheld technology have all influenced consumer behavior.
The distribution channel segment is further divided into direct channel and indirect channel sub-segments of which the direct channel sub-segment is anticipated to hold the maximum share of the global market revenue. The direct channel sub-segment is predicted to register a revenue of $149.41 billion during the forecast period.
Direct response marketing includes traditional media advertising, telemarketing, and the use of the internet to solicit business. Consumers may rapidly evaluate policy advantages and cost using the internet, particularly on sites dedicated to evaluating insurance quotes. Because marketing insurance products through a direct response strategy is significantly less expensive than through an agency network, and the competition is much larger, it is the most cost effective for the consumer.
The end-users segment is further bifurcated into businesses and individuals. Among these, businesses sub-segment is anticipated to hold the maximum share of the global market revenue. It is predicted that the market shall generate a revenue of $186.56 billion by 2028, growing from $100.89 billion in 2020, with a CAGR of 7.8%.
For businesses to protect themselves against unforeseen losses, specialty risk insurance products are becoming increasingly necessary. Litigation, property damage, commercial commitments, and other risks are not covered by conventional non-life insurance plans, thus they need specialty business insurance. As a result of these factors, the growth of the businesses sub-segment is predicted to accelerate in the next years.
The specialty insurance market 2020 in Asia-Pacific is valued at $36.72 billion and is anticipated to be the fastest growing market and reach $69.11 billion by 2028, with a CAGR of 8.0%.
The need for specialty insurance in the Asia-Pacific area is constantly expanding as the number of businesses grows. The expansion of the specialty insurance market is likely to be aided by an increase in the number of enterprises, as well as the coverages offered by insurance providers in the region.
Top 10 Major Key Players in the Global Specialty Insurance Market are -
- American International Group Inc.
- Assicurazioni Generali S.P.A.
- Berkshire Hathaway Inc.
- Munich Re
- Tokio Marine HCC
Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.
Porter’s Five Forces Analysis for the Global Specialty Insurance Market:
- Bargaining Power of Suppliers: Specialty insurance market comprises reasonable number of distributors and suppliers and hence, the distributors and supplier control is expected to be moderate, leading in moderate bargaining power of dealers.
Hence, the bargaining power of the supplier is moderate.
- Bargaining Power of Buyers: Consumers will have high bargaining power, mainly due to the high players operating in the specialty insurance market.
Hence, the bargaining power of the buyer is high.
- Threat of New Entrants: In the modern world, new entrants may face multiple new barriers, like legal and government policies.
Hence, the threat of the new entrants is moderate.
- Threat of Substitutes: There are few alternate products for specialty insurance.
Thus, the threat of substitutes is moderate.
- Competitive Rivalry in the Market: Robust presence of key players such as US specialty insurance company, Assicurazioni Generali S.P.A., and Anchor Specialty Insurance is creating massive rivalry in the local as well as international market. Also, high spending on business expansion and strategic tie-ups are some of the main factors rising competitive rivalry among the companies.
Thus, the competitive rivalry in the market is high.