The 10 largest global reinsurers of 2019 represent a paragon of stability, according to A.M. Best’s new market segment report. That’s largely because so little changed from the year before.

Nine of the top 10 held onto their rankings compared to 2018, the ratings agency found. Evaluated in terms of gross premiums written, they include the 1-9 ranked reinsurers Swiss Re Ltd, Munich Re, Hannover SE, SCOR, Berkshire Hathaway, Lloyd’s, China Re, Reinsurance Group of America, and Great West Lifeco (a life and health reinsurer), respectively.

PartnerRe made the number 10 slot, representing the sole new entry to the ranking. The reinsurer reached number 12 in 2018. PartnerRe moved past Korean Re and GIC (number 11 and 12, respectively, in 2019) after a 15.6 percent growth in gross premiums written. A.M. Best noted that PartnerRe moved to the top 10 after falling just below it for the previous three years.

Moving out of the top 10, Validus saw some significant movement, according to the A.M. Best report. The reinsurer ranked 28 in 2019, up from 33 the year before. A.M. Best explained that Validus climbed by growing its gross premiums written by more than 39 percent, year-over-year. As well, it was able to grow its non-property lines and expand its business relationship with AlphaCat to improve production totals.

The year 2020 could produce much different results, thanks to the pandemic. As A.M. Best noted, early estimates of loss ratio increases for all of 2020 for reinsurers could range from 5 percent to more than 20 percent. The market also continues to harden, which, combined with COVID-19 related claims uncertainty, will put pressure on reinsurance carriers to improve their underwriting discipline, A.M. Best said.

Still, there are hopeful signs, including the hardening market that creates possible opportunities for reinsurance growth even in difficult times.

“Property catastrophe, specialty lines and some U.S. casualty lines have been showing much-needed improvement in pricing coverage terms,” A.M. Best wrote. “The risk is that the positive market momentum turns out to be short-lived, excess capacity starts expanding and we end up where we started.”

A.M. Best said that pricing momentum through the rest of this year must become strong enough to offset previous years’ losses as well as the uncertain impact from COVID-19 to keep the sector in solid shape.

The full report is A.M. Best’s Market Segment Report “Global Reinsurers Maintain Equilibrium Through COVID-19 Turbulence.”

Source: A.M. Best

Topics Mergers & Acquisitions Reinsurance AM Best