Munich Re is once again the world’s largest reinsurer after losing the top spot in 2017 to rival Swiss Re, according to A.M. Best’s new market segment report.
A.M. Best made its assessment based on reinsurance gross premiums written.
Munich Re reclaimed the No. 1 spot with $37.8 billion in reinsurance gross life and P/C premiums written, after landing in second place the previous year. The P/C sector claimed nearly $21.4 billion of the total. By contrast, Swiss Re Ltd. booked close to $34.8 billion in gross life and P/C reinsurance premiums written for the year, of which nearly $20.4 billion was from the property/casualty sector.
A.M. Best noted that aside from the 2017 list, Munich Re has been the world’s largest reinsurer every year since 2010, when Swiss Re had the top spot. Beyond more gross premiums written, A.M. Best said that stronger-than-expected economic growth in Europe and a weaker British pound also helped Munich Re.
“Collectively, these factors helped contribute to an appreciation of the euro against the U.S. dollar, thus benefiting Munich Re (which reports in euros) in the process,” A.M. Best said.
Both Munich Re and Swiss Re did large amounts of business in 2017 but were among the many reinsurers that suffered strains during the onslaught of natural catastrophes that hit last year. Munich Re’s combined ratio was 114, and Swiss Re’s was 115.4, according to the A.M. Best compilation.
Berkshire Hathaway scored No. 3 on the list, with $22.7 billion in gross life and P/C reinsurance premiums written, with P/C premiums covering $17.8 billion of the total. Berkshire was in fifth place on the previous year’s A.M. Best ranking.
Hannover SE and SCOR SE grabbed the No. 4 and 5 spots on the list, respectively.
Hannover produced $21.3 billion in gross life and P/C reinsurance premiums written for 2017, of which $12.8 billion was in the property/casualty space. SCORE SE booked $17.7 billion in gross life and P/C reinsurance premiums written, with P/C premiums taking up $7.2 billion of the total.
Market Still Stuck in “Soft” Mode
A.M. Best’s new list of the top reinsurers is part of a report that also sees a reinsurance sector almost continually stuck in a soft market.
The report notes that there was some hope that reinsurance pricing would rebound after 2017 catastrophe losses reached record levels, though that did not happen.
“The degree of optimism for a material and sustainable improvement in reinsurance pricing that existed immediately following the 2017 catastrophe losses did not develop as anticipated,” A.M. Best said. “While pricing terms and conditions did stabilize, they continue to remain below expectations for producing a reasonable risk-adjusted return relative to the average cost of capital for most reinsurers.”
A.M. Best said it will continue to maintain a negative outlook for the reinsurance market, “as we expect overall market conditions to remain very competitive over the near term.”
The full market segment report – “Global Reinsurance: Optimism Fizzles, It’s Back to the ‘New Normal – ‘” explores the overall state of the global reinsurance industry.
Source: A.M. Best