Reshoring to Generate $30B in Commercial P/C Premiums by 2026: Swiss Re

September 13, 2022
New You can now listen to Carrier Management articles!

Swiss Re predicts that deglobalization will generate $33 billion in new commercial property/casualty insurance premiums by 2026, according to its latest sigma report: “Maintaining resilience: the role of P&C insurers in a new world order.”

Supply chain restructuring is expected to create investments in new infrastructure and production facilities, increasing demand for engineering insurance. Reshoring production capacity domestically is forecast to generate $30 billion in global commercial insurance premiums by 2026, mostly from engineering, property and liability covers. “Friend-shoring” of supply chains to allied countries would add another $3 billion in premiums, Swiss Re said. However, marine and trade credit premiums would decline slightly as global trade is expected to slow.

“Six months into the war in Ukraine, our world has changed dramatically. Triggered by the war and the pandemic, we are shifting from an interconnected to a multi-polar world faced with disrupted supply chains, energy and food crises,” said Jérôme Haegeli, group chief economist at Swiss Re, in a statement.

“Insurance is becoming even more vital to the economy, contributing to the financial stability of businesses by covering supply chain risks,” he said. “The industry can also facilitate the transition to a green economy by insuring and investing in renewable energy infrastructure, and by expanding agricultural insurance, it can contribute to global food security.”

Gianfranco Lot, head of Global Reinsurance at Swiss Re, said: “In the changing risk landscape, commercial property and casualty insurance will remain a mainstay of resilience—for instance, by helping businesses maintain financial stability as operating circumstances change, providing solutions to help reduce cash flow volatility and stabilizing earnings while supply chains are being realigned.”

Other findings of the sigma study: