Specialty Insurance Market by Type (Life Insurance and Non-life Insurance), Distribution Channel (Direct and Indirect Channel), End-users (Businesses and Individuals), and Regional Analysis (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2021–2028

Global Specialty Insurance Market Analysis

The global specialty insurance market size is predicted to garner a revenue of $243.70 billion in the 2021–2028 timeframe, growing from $133.64 billion in 2020, at a healthy CAGR of 7.6%.

Market Synopsis

The specialty insurance market share is expected to rise due to an increase in demand for specialized expertise and technology advancements.

However, misconceptions and a lack of information about specialty insurance may hinder the specialty insurance market's expansion.

According to the regional analysis of the market, the Asia-Pacific specialty insurance market share is anticipated to grow at a CAGR of 8.0%, by generating a revenue of $69.11 billion during the review period.

Specialty Insurance Market Overview

Specialty insurance is meant to protect enterprises with unusual needs from liability claims. Furthermore, this insurance is sought for objects or situations that are considered one-of-a-kind and are not often covered by ordinary insurance policies. Specialty insurance is in great demand in the construction, environmental, healthcare, and energy industries. Errors and omissions (E&O) insurance, a sort of professional liability insurance, is also a common type of specialty insurance plan.

Covid-19 Impact on Specialty Insurance Market

In March 2020, the World Health Organization declared COVID-19 as a pandemic, which resulted in restrictions on travel and disturbances in financial markets, as well as negatively impacted supply chains and production levels. The COVID-19 pandemic has caused massive disruptions and changes in a variety of businesses. The COVID-19 pandemic is having a negative influence on specialty insurance. During the crisis, worldwide travel, trade, and new developments were halted, affecting industries like aviation, marine, and construction. As a result, the utilization of underlying assets has decreased fast, and losses in these sectors have resulted in a drop in specialty insurance coverages. As a result, during the global health crisis, demand for specialty insurance policies has plummeted.

Advancements in Technology are Anticipated to Drive the Specialty Insurance Market Growth

Insurance businesses are leveraging innovative digital solutions to extend their operations and establish product lines based on niche client demand as a result of shifting business models, which contributes considerably to market growth. For loss prediction and prevention, risk monitoring, and claims processing, the integration of technologies such as cloud computing, artificial intelligence, and blockchain is becoming a prominent element that is expected to provide profitable potential for specialty insurance market growth in the coming years.

To know more about global specialty insurance market trends, get in touch with our analysts here.

Lack of Knowledge Might Restrain the Market Growth

Misconceptions and a lack of information about specialty insurance stifle the specialty insurance market's expansion. Competitive pricing based on coverages, the need for a whole new policy to cover a company's assets, and agent commissions are just a few of the common myths about specialty insurance. Furthermore, market restrictions include awareness of the various specialty risk insurance covered, repayment mechanisms, and transparency in terms of prices for specialty insurance.

Developing Economies are Expected to Create the Opportunities for Specialty Insurance Market

Developing nations, particularly rising economies like Australia, India, China, Singapore, and South Korea provide considerable opportunity for specialty insurers to expand and develop their portfolios. Specialty insurance offers a wide range of coverage alternatives as well as a great deal of flexibility in terms of coverages, policy term, and policy duration, all of which contribute to the specialty insurance market's expansion. Furthermore, a surge in demand for specialized expertise is a major driver of market expansion.

To know more about global specialty insurance market opportunities, get in touch with our analysts here.

Source: Research Dive Analysis

The life insurance sub-segment is predicted to have a dominating market share in the global market and register a revenue of $200.21 billion during the forecast period. For those who would have difficulty qualifying for standard coverage, specialty life insurance focuses on guaranteed and simplified life insurance policies. For someone with a pre-existing medical condition, these insurances may make sense. They are also wonderful options for individuals who do not have the time or desire to undertake a physical examination.

The non-life insurance sub-segment is expected to be the fastest growing in the global market and register a revenue of $43.49 billion, with a CAGR of 8.3% during the forecast period. Non-life insurance covers commercial auto insurances, flood insurance, cyber liability insurance, special event insurance and others. One of the reasons for non-life insurance's consistent growth is a greater emphasis on innovation, which is driven by a greater emphasis on customer centricity. Behavioral developments and preferences of insurance purchasers have fueled increased innovation in the insurance sector throughout the years. Consumer behavior has shifted as a result of increased internet usage, more social networking, and behavioral shifts related to increased use of mobile and handheld technology.

Source: Research Dive Analysis

The direct channel sub-segment is predicted to have a dominating market share in the global market and register a revenue of $149.41 billion during the forecast period. Advertising via traditional media, telemarketing, and the use of the internet to solicit business are all examples of direct response marketing. On the internet, consumers may readily compare policy benefits and pricing, particularly on various sites dedicated to comparing insurance prices. The direct response technique is the most cost effective for the consumer because marketing insurance goods is significantly cheaper than through an agency network, and the competition is much broader.

The indirect channel sub-segment is anticipated to experience the fastest market growth during the forecast period. It is predicted that the market shall generate a revenue of $94.29 billion by 2028, growing from $51.02 billion in 2020, with a CAGR of 7.8%. The indirect channel is comprised of agents and brokers. Insurance agents and brokers are investing in digital technologies such as cloud computing in order to better serve customers online while increasing sales and margins. These internet portals and other mobile platforms are intended to improve corporate processing efficiency while cutting costs. The growth of the sub-segment is predicted to be boosted by the integration of technology into existing services.

Source: Research Dive Analysis

The businesses insurance sub-segment is anticipated to generate highest revenue during the forecast period. 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%. Specialty insurance plans are becoming increasingly important for businesses to protect themselves against unforeseen losses. Specialty business insurance protects them from lawsuits, property damage, commercial obligations, and other risks that aren't covered by standard non-life insurance plans. The growth of the businesses sub-segment is expected to accelerate in the next years as a result of these causes.

Source: Research Dive Analysis

The Market for Specialty Insurance in Asia-Pacific to be the Fastest Growing

Asia-Pacific is anticipated to be the fastest growing market during the forecast time period and reach $69.11 billion by 2028, with a CAGR of 8.0%. The Asia-Pacific region market is predicted to increase significantly throughout the forecast period due to the presence of various emerging economies and financial centers such as Singapore, India, and Hong Kong. Insurance firms in the region are aiming to give low-cost insurance premium options. As cloud technologies become more widely used and internet users become more frequent, the region's insurance companies are increasingly moving to digital insurance platforms.

Competitive Scenario in the Global Specialty Insurance Market

Product launches and mergers & acquisitions are common strategies followed by major market players.

Source: Research Dive Analysis

Some of the leading specialty insurance market players are AXA, American International Group Inc., Allianz, Assicurazioni Generali S.P.A., Berkshire Hathaway Inc., Chubb, Munich Re, PICC, Tokio Marine HCC, and Zurich.

Porter’s Five Forces Analysis for the Global Specialty Insurance Market:

• Bargaining Power of Suppliers: Specialty insurance market contains moderate concentration of distributors & suppliers and therefore, the distributors & suppliers’ control is predicted to be reasonable, resulting in moderate bargaining power of dealers.
  Thus, the bargaining power of the suppliers is considered to be moderate.
• Bargaining Power of Buyers: Buyers might have great bargaining power, significantly because of high players functioning in the specialty insurance market.
  Therefore, the bargaining power of the buyer is high.
• Threat of New Entrants: Specialty insurance companies entering the market are adopting technological innovations to attract clients. But due to the high government regulations,
  the threat of the new entrants is moderate.
• Threat of Substitutes: There are fewer product alternatives for specialty insurance.
  Thus, the threat of substitutes is moderate.
• Competitive Rivalry in the Market: The competitive rivalry among industry leaders is rather intense, especially between the global players including US Specialty Insurance Company, Anchor Specialty Insurance, and Berkshire Hathaway Inc.
  Therefore, competitive rivalry in the market is high.