Primary insurers worldwide ceded about $260bn or 5% of direct premiums written in 2018 to the global reinsurance markets, according to an estimate by Swiss Re Institute.

In its latest World Insurance report released last week, Swiss Re notes that the cession rates (ceded premiums / direct premiums) were higher in non-life (8.4%, $200bn) than in life (2%, $60bn). This is due to the dominance of savings premiums in life, which are typically not reinsured.

In non-life, cession rates among emerging regions, particularly emerging Asia, excluding China, the Middle East, Africa and Latin America are higher than overall, indicating that these countries are of higher importance in the reinsurance sector than in the primary industry.

Like in the primary industry, the US and Canada are the dominant markets in reinsurance (a third of global premiums in non-life and 53% in life). Cession rates by line of business vary considerably. In non-life, cession rates in motor are very low (~4%), but higher in property (16%), liability (14%) and special lines (>30%) such as aviation, marine or engineering.

Among emerging markets, China in particular, motor cession rates are also low, while in property, liability and special lines they are higher than among advanced markets.

The report says that the reinsurance sector is better positioned with respect to the two big vulnerabilities facing primary insurers stated above. First, as cession rates demonstrate, motor does not dominate. And in life, reinsurers principally cover biometric risk, so they are less affected by the downturn in traditional savings business