Insurers Target Growth and New Risks in Willis Survey
Insurance companies are poised for expansion, seeking to utilize accumulated capital to drive growth, explore new markets, and increase capacity, according to a recent survey conducted by Willis, which gathered insights from senior decision-makers at prominent insurance firms worldwide.
This development is expected to benefit buyers, as insurers will likely intensify competition for their business. Moreover, the survey indicates that insurers are considering facultative reinsurance as a means to supplement their capital reserves and fuel expansion.
The research drew on responses from 380 senior executives at leading insurance companies across various regions, including North America, Europe, the Middle East, APAC, and Latin America.
A significant majority, 56%, identified global expansion as a key opportunity for growth over the next two years, marking an increase from 39% in the previous survey conducted in 2024. As Willis noted, “In a rapidly softening market, many insurers are writing business in countries outside of their normal catchment to drive growth.”
Some 52% of respondents cited entering new markets and risk areas as top strategic objectives for the next two years, up from 45% in the prior survey. Additionally, 55% listed increasing capacity as a primary objective, representing an increase from 48%.
Evolution of Risk Concerns Influences Strategy
The survey also highlights a growing concern among insurers regarding certain key risks. Geopolitics emerged as the top concern, with 57% of respondents citing it, up from 52% in 2024. AI automation ranked second, marking a new entry on the list. Cyber risks followed, with 54% of respondents citing it, up from 24%. Concerns about climate and extreme weather have also increased significantly, rising to 40% from 30% two years ago.
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Willis cautioned in the report, “A major systemic event in any of these areas could be enough to change the cycle back to harder conditions.”
The survey reveals that 60% of insurers plan to increase their use of facultative reinsurance over the next two years, while only 13% intend to reduce their usage, showing the growing importance of facultative reinsurance across market cycles.
A majority of insurers, 52%, identified capital management as a primary reason for purchasing facultative reinsurance, up from 44% in 2024.
Meanwhile, 82% of respondents viewed facultative reinsurance as a key component of their risk management strategies, enabling them to manage capacity, capital, and appetite. In contrast, only 22% reported using facultative reinsurance as a last resort, down from 28% in the 2024 survey.
Willis observed, “The results confirm the trend identified in the 2024 survey that facultative insurance is no longer viewed only as a defensive position to protect against problem risks but also as a flexible tool to support business priorities such as expansion, while also managing risk and volatility.”
Furthermore, Willis noted, “Our findings suggest that as insurers pursue growth aggressively, many are drawing on facultative reinsurance both to provide extra capacity and manage the associated risks. But there is rising concern about factors such as geopolitical tensions, cybercrime, and AI, which could impact insurer strategies and increase their exposures to large scale losses and long-tail liabilities.”
