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Bain: Insurance gains are cyclical as cost-of-risk remains key

Bain says affordability and persistent protection gaps are holding coverage expansion back, even as reinsurance premiums are still growing faster than the broader insurance industry.

Reported · Written up by our desk · Industry & Deals

Bain & Company said improving profitability and premium growth in the global insurance and reinsurance market may not translate into durable advantages, warning that recent gains are largely cyclical and can mask unresolved issues. In a report discussed by Artemis, Bain argued that the next phase of value creation will favor insurers that lower the cost of risk, expand access to coverage, and improve capital efficiency. The consultancy pointed to lower-cost and more efficient capital as a driver of real gains, while also highlighting standardisation as a way to support greater adoption of insurance securitization. Bain linked securitization to potential reductions in the cost of capital, and suggested that insurance-linked securities could see growth as investment demand rises while supply and capital mobility slow down. The firm also warned that while insurers may benefit from current momentum, they should not treat it as a structural edge.

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