Specialty Insurance Market Size, Share & Trends Analysis Report By Type, By Distribution Channel, By End-user, By Region, And Segment Forecasts, 2021 To 2028

Specialty insurance is a type of insurance that offers coverage for unique or special items that are typically not covered under other insurance policies. Small & medium-sized enterprises often seek non-standard policy options to address their specializations in response to the shifting threats, market forces, and opportunities. As such, SMEs offer significant growth opportunities for the specialty insurance market across the globe. Moreover, specialty insurance providers are focusing on using digital services platforms and Application Programming Interfaces (APIs) to access a range of functions and data across the full policy lifecycle, including additional integration of third-party services.

Specialty Insurance Market Segmentation

The global specialty insurance market is expected to witness significant growth over the forecast period owing to the surge in demand for specialized expertise. Moreover, the increasing incorporation of technologies in specialty insurance offerings is further expected to drive the specialty insurance market growth over the forecast period. The implementation of technologies such as the Internet of Things (IoT) and blockchain provides the ability to accurately evaluate both future and current risks occurring in specialty insurance. Furthermore, specialty insurance provides various coverage options with high flexibility in terms of the policy term, policy period, and coverages, which is significantly contributing to the market growth.

The COVID-19 pandemic has had a negative impact on the specialty insurance market. Sectors such as marine, construction, and aviation have been adversely affected by the halt in global trade, new builds, and travel during the crisis. Consequently, the use of underlying assets has drastically reduced, and losses incurred by these sectors have further led to a decline in specialty insurance coverages.

The industry has witnessed an increase in demand for specialized expertise in specialty insurance programs since it provides both custom and comprehensive design to effectively meet the requirements of business segments with unique risk profiles. The increasing demand for specialty insurance among Program Administrators (PAs), which are one of the key distributors of specialty insurance products, is also expected to fuel the market growth over the forecast period. These administrators act as specialized experts as they have a deep understanding of the target market exposure. Brokers, policyholders, and specialty insurers are increasingly relying on administrators’ expertise to provide niche specialty coverages to their customers.

Venture capital firms across the globe are focusing on investing in specialty insurance companies owing to the increasing growth prospects of the market over the forecast period. For instance, in September 2021, Ategrity Specialty, a specialty property & casualty insurance provider, announced that it had raised USD 75 million capital led by Sequentis Financial LLC to strengthen its product offerings and support its continued growth. The company is expected to use this capital to invest in data and analytics capabilities and move to the next phase of growth.

Key players in the specialty insurance market include Allianz; American International Group, Inc.; ASSICURAZIONI GENERALI S.P.A.; Berkshire Hathaway Inc.; Munich RE; Tokio Marine HCC; and Argo Group, among others. These players have adopted growth strategies such as mergers & acquisitions, partnership agreements, product portfolio expansion, collaborations, and geographical expansion to strengthen their foothold in the market.