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The global specialty insurance market was valued at USD 90 billion in 2023 and grew at a CAGR of 10% from 2024 to 2033. The market is expected to reach USD 233.43 billion by 2033. The diversifying nature of rising global risks across industries will drive the growth of the global specialty insurance market.
Standard insurance policies have a set terms and conditions that cover specific risks in a comprehensive manner. However, there are instances where the risk is not-standard and is unique or inherent to a specific industry or individual. These risks, that are not covered by standard insurance are covered by something known as specialty insurance. They are tailored to the given industries and their risks. They are highly flexible as they need to be customized according to the needs/demands of these industries. these insurance policies and there underwriting process require domain expertise and highly qualified professionals to understand the risks and attack appropriate values to such risks to derive at the final premium. These parameters are highly variable and can sometimes be difficult to quantify as well. the changing global world with a shift towards a digitalized space has highlighted unique risks that are not covered by standard policies operating according to the old world, thereby contributing to the need of specialty insurance. It serves as a cushion to mitigate or minimize losses arising from these risks which is vital for business continuity.
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The evolving nature of industries – rapid urbanization, globalization and proliferation of the digital age given high-speed internet services has led to an increase in risks to businesses looking to expand their presence beyond domestic borders. Such a strategic move comes with significant risks such as foreign and international regulations, geopolitical and political uncertainties, instability arising due to armed and unarmed conflicts, economic and foreign currency fluctuations. Similarly, the expanding digital age with automation across industries has highlighted the need to cover digital threats like cyberattacks. Standard insurance policies do not cover these risks. Therefore, the need for specialty insurance arises from the lacuna faced by standard insurance policies. The expanding international trade and business, rapid globalization and expanding digital market will contribute to the rising need for specialty insurance to cover the evolving risks because of these events.
Specialty insurance is associated with high premiums – specialty insurance covers risks that are not standard and covered by standard insurance policies. These risks are unique and complex. They don’t have a set framework or standardized calculation method as they are unique and need to evaluated standalone by experts. The complex underwriting or evaluation process is itself costly. this added to the unique nature of risks contributes to high premium costs. the costs of specialty insurance render them unaffordable and therefore inaccessible to smaller industry players or average income individuals. This will limit the market’s growth.
Stringent regulatory guidelines – regulatory authorities have made insurance mandatory in certain aspects of the economy. For instance, car insurance of third part accident insurance is compulsory in many economies given the rising number of accidents, thereby safeguarding citizens financially through insurances. Similarly, regulatory authorities encourage individuals and businesses to insure their valuables. Such regulations more or less compel business to buy specialty insurance for their businesses against the inherent risks to safeguard themselves as well as to meet compliance requirements. Absence of insurance leads to heavy financial losses and legal troubles which is taxing for both the government and other stakeholders. In some instances, government mandates insurance to protect the larger consumer interest. for example, it is compulsory for banks to insure the deposits of their customers in the face of burglary, ransom demands, cyberattacks and bankruptcy. Therefore, the stringent regulatory guidelines mandating insurance coverage across sectors will bode well for the market’s growth during the forecast period.
The regions analysed for the market include North America, Europe, South America, Asia Pacific, the Middle East, and Africa. Europe emerged as the most significant global specialty insurance market, with a 40% market revenue share in 2023.
Europe has a well-established, regulated, monitored and controlled insurance industry. The established infrastructure facilitates innovation and contributes to the advancement of specialty insurance. The well-educated and aware populace also augment the market. the diverse sector of the region along with the evolving nature of the economy and thereby risks associated with it contribute to the market’s dominance. The stringent regulatory environment with the most advanced and comprehensive policies in place along with a robust implementing and accountability infrastructure augments the market’s growth. the well-connected and accessible insurance distribution network also contributes to the regional market’s dominance.
Europe Region Specialty Insurance Market Share in 2023 - 40%
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The type segment is divided into political risk and credit insurance, entertainment insurance, art insurance, livestock and aquaculture insurance, marine, aviation and transport (MAT) insurance, and others. The marine, aviation and transport (MAT) insurance segment dominated the market, with a market share of around 35% in 2023. MAT insurance insures against loss during transportation that takes place through sea, air and land. It includes the loss to cargo due to natural disasters, human or animal attacks, armed attacks, or any other unforeseen damage. the increasing trade across borders makes specialty insurance for MAT vital to protect against property and capital loss. The insurance covers both property and people. These insurances are high value insurance given the magnitude/volume and value of trade being conducted. Additionally, the risks are also higher given the plethora of components associated with it. furthermore, regulatory mandates make it compulsory for stakeholders to have insurance. Given the geopolitical uncertainties, more recently the attacks on shipping containers travelling through the Red Sea by the Houthi Rebels, highlight the importance of insurance in this sector.
The distribution channel segment is divided into brokers and non-brokers. The brokers segment dominated the market, with a market share of around 68% in 2023. Brokers are basically the middle-men or intermediaries who communicate between customers and insurance companies. They enable a wider reach for companies while offering consumers a safe, convenient and comfortable space to discuss their needs. they are experts and can effectively communicate necessary details accordingly after understanding the needs of consumers. they offer personalized services which improves customer satisfaction and builds trust. They are authorized personnel of insurance companies which also enables trust and ensures authenticity of services. brokers are a one-point-contact for consumers and having a trusted individual offers peace of mind to customers while also offering quick complaint redressals.
The end user segment is divided into businesses and individuals. The businesses segment dominated the market, with a market share of around 74% in 2023. Business face unique risks of significant magnitude. They face complex risks and are vulnerable to heavy losses and business discontinuity against unforeseen circumstances. They need expertise to assess these risks. Additionally, they are required to do so because of regulatory mandates. They are well-aware and well-equipped with necessary capital to buy these insurance policies. It is in their strategic interest and therefore this translates to businesses being dominant end-users in the specialty insurance market.
Report Description:
| Attribute | Description |
|---|---|
| Market Size | Revenue (USD Billion) |
| Market size value in 2023 | USD 90 Billion |
| Market size value in 2033 | USD 233.43 Billion |
| CAGR (2024 to 2033) | 10% |
| Historical data | 2020-2022 |
| Base Year | 2023 |
| Forecast | 2024-2033 |
| Region | The regions analysed for the market are Asia Pacific, Europe, South America, North America, and Middle East and Africa. Furthermore, the regions are further analysed at the country level. |
| Segments | Type, Distribution Channel and End-User |
As per The Brainy Insights, the size of the global specialty insurance market was valued at USD 90 billion in 2023 to USD 233.43 billion by 2033.
Global specialty insurance market is growing at a CAGR of 10% during the forecast period 2024-2033.
The market's growth will be influenced by the evolving nature of industries.
Specialty insurance is associated with high premiums could hamper the market growth.
This study forecasts revenue at global, regional, and country levels from 2020 to 2033. The Brainy Insights has segmented the global specialty insurance market based on below mentioned segments:
Global Specialty Insurance Market by Type:
Global Specialty Insurance Market by Distribution Channel:
Global Specialty Insurance Market by End User:
Global Specialty Insurance Market by Region:
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