Reinsurance, a chair for two
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From the outset, the industry has been monopolized by European groups. This is particularly true of non-life reinsurance, where only American Berkshire Hathaway stood in fifth place in 2022, well behind the leading trio of Munich Re, Swiss Re and Hannover Re.
Secondly, the industry's core group of three reinsurers and Lloyds of London is stable, with Munich Re and Swiss Re alternating in first place for decades.
The arrival in force of Bermudan reinsurers after the 9/11/2001 events did not change the balance of the market. Today, this specialized natural catastrophe segment provides traditional reinsurers with back-up capacity, relieving them of heavy risks.
As with the Bermudans, the emergence of regional reinsurers Africa Re, GIC Re and IRB Brasil has by no means disrupted the global hierarchy. These players, along with state-owned reinsurers, merely complement the capacities offered by the majors.
In fact, the major groups with a physical presence in the world's main reinsurance markets have a stranglehold on the market. They are the only ones to offer a very high level of financial capacity and world-class expertise. As an example of this global network, the first African reinsurer in 2022 was Munich Re South Africa.
This excessive concentration does, however, give cause for concern with small and medium-sized reinsurers struggling to survive and, above all, to grow. The high financial and regulatory barriers, the rating system and the retrocession lock-in primarily benefit the industry leaders. This de facto protection leads to excessive dependence on a small number of players, which could pose a problem in the event of a major disruption.
