Good morning, ! It’s Wednesday and we are covering the surprising boom in baggage insurance, the strategic expansion of Legal & General into private markets, and why microinsurance is quietly becoming a major growth engine in emerging economies.

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DATA DIVE

Lost Bags, Found Margins

The baggage insurance market is moving from afterthought to front-runner. Globally projected to double from $17.3B to $32.7B by 2033, this segment is riding a tailwind of digitized distribution and surging travel volume. Platforms are embedding coverage directly into bookings, leaning on APIs and data to turn a passive upsell into sticky revenue. Top offenders like Delhi’s Gandhi International and U.S. carriers like Southwest are offering insurers both a headache and an underwriting roadmap. Bottom line? Lost luggage isn’t a risk. It’s a growth lever. (Read or Listen to the Full Article)

TREND OF THE WEEK

Premium Growth: From Acceleration to Attrition

Global insurance premiums surged in 2024, but don’t get used to it. Swiss Re’s latest forecast shows a sharp growth deceleration across all lines from 2025 to 2026. Health and liability, long considered defensive, are now expected to grow at just 2.5% CAGR, while property and motor, despite big 2024 jumps (4.7% and 6.9%, respectively), drop to 1.5% and 1.9%.

The signal: 2024 was a pricing catch-up year, not a structural upswing. Inflation-linked repricing, catastrophe recalibrations, and pent-up demand inflated last year’s numbers. But going forward, economic softening and competition are expected to weigh on top-line growth, even in lines with prior momentum.

Why it matters: For insurers, this shift underscores the urgency of margin management, risk selection, and tech-enabled efficiency. For investors, the easy growth is likely behind us, and underwriting discipline will matter more than ever. (More)

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MARKET MOVERS

INSURTECH CORNER

Microinsurance’s Quiet Surge

Microinsurance isn’t just a social good, it’s becoming serious business. The market is expected to grow from $72.9B in 2022 to $122.6B by 2030, a 68% increase over eight years.

Behind that growth? Three converging trends: smartphone penetration in emerging markets, API-first platforms enabling low-cost distribution, and insurtechs designing hyper-targeted, usage-based products. As traditional insurers hesitate to operate at razor-thin margins, startups are leveraging scale and digital efficiency to serve vast underserved populations—many for the first time.

It’s not just philanthropy. With billions of potential customers and rising economic resilience in the Global South, microinsurance is morphing into a high-volume, low-cost engine for growth.

Why it matters: Investors and insurers ignoring this market may be missing the next great leap in embedded insurance, particularly as fintechs, telcos, and e-commerce platforms race to bundle coverage at point-of-sale.

DEAL OF THE WEEK

Platform Expansion, Courtesy of Proprium

Legal & General (L&G), a UK-based insurance and investment firm is doubling down on Private Markets, acquiring a 75% stake in Proprium, a global real estate private equity firm with $3.5B AUM. The move adds muscle to L&G’s plan to hit £85B in private markets AUM by 2028, particularly across Europe and APAC. It’s not just about scale—L&G is injecting up to $300M to supercharge Proprium’s fund strategies. With recent activity including $1.6B in acquisitions and $800M+ in distributions, Proprium brings the deal volume, and L&G brings the balance sheet. Strategic fit: tight. Growth thesis: intact. (More)

MACROECONOMICS

The 90-Day Bluff

After dragging each other through a multi-year economic cage match, the US and China have declared a 90-day tariff ceasefire. The reprieve dropped reciprocal duties from a suffocating 145% to just 10%, and markets cheered. But don’t mistake volatility suppression for peace. This is a classic Nash equilibrium—where neither side can improve without risking a worse outcome.

The underlying driver? Mutual economic disruption: Chinese factories were collapsing, while US bonds flirted with instability. The chart says it all: even at peak tension, bilateral trade remained robust. Expect M&A teams to use this temporary window to reassess China exposure, lean into nearshoring, and prepare for Round 27 of this infinite game. (More)

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"I find that the harder I work, the more luck I seem to have."

Thomas Jefferson