Munich Re holds onto the highest spot in AM Greatest’s annual rating of the highest 50 international reinsurance teams for 2022, with Swiss Re coming in because the second-largest reinsurer — for the third yr in a row.
These two reinsurers account for one-quarter of the highest 50 reinsurance gross premiums written in 2022, up from 24.3% in 2021, which AM Greatest stated is especially notable given the euro’s depreciation.
Complete gross reinsurance premiums written by the highest 50 teams elevated by 2.6% to US$363.6 billion in 2022, from US$354.4 billion in 2021, stated the rankings company, explaining that premium progress for a lot of reinsurers was primarily pushed by robust charge will increase, fairly than publicity progress. (See chart beneath. Click on on the picture to enlarge it).
“Nonetheless, international funding market turmoil and extra frequent and extreme international disaster losses, compounded by extreme secondary peril losses, resulted in lots of reinsurers failing to fulfill their value of capital lately,” stated the report titled “World’s 50 Largest Reinsurers.”
The No. 3 and 4 spots within the rating – Hannover Re and Canada Life Re, respectively – had been unchanged from their positions from 2021. On the identical time, Berkshire Hathaway moved up one spot to fifth place – pushed partially by its acquisition of Alleghany Corp. – which pushed SCOR to sixth place. The 4 largest reinsurers at year-end 2022 had been ranked the identical as in 2021.
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Ranked at No. 7 on the record, Lloyd’s noticed a small premium decline, though it was primarily pushed by the ten.1% depreciation of the pound agains the US greenback. At fixed alternate charges for the present and prior yr, GPW grew roughly 7.2%, AM Greatest defined. (Lloyd’s is No. 4 on the record of non-life reinsurance teams. See exhibit 3 beneath).
“The ten largest reinsurers on the record accounted for 69.4% of complete reinsurance GPW, up from 67.9% at year-end 2021, and barely larger than the 68.55 at year-end 2020,” the report continued. “Regardless of this focus, the worldwide reinsurance market stays extremely aggressive.” (See exhibit 2).
Rankings Under Prime 10
AM Greatest famous that there was vital motion within the rankings beneath the highest 10, which was “pushed primarily by shifts in reinsurance portfolios’ combine, as firms sought to scale back working efficiency volatility and steadiness sheet vulnerability or enhance their exposures to sure traces as charges grew to become more and more enticing.”
The businesses with two of the most important rating enhancements – Odyssey Group Holdings and Allied World Assurance Co. Holdings – have the identical dad or mum firm: Fairfax Monetary Holdings, in keeping with AM Greatest. Odyssey rose from No. 27 at year-end 2021 to No. 20 in 2022, whereas Allied World rose from No. 44 to No. 39.
“Odyssey’s GPW grew 30.9%, pushed largely by its P/C traces of enterprise within the US, which benefited from new enterprise, expanded relationships with present purchasers, and improved pricing,” AM Greatest continued. Between year-end 2021 and year-end 2022, Allied World’s GPW grew 24.3%, “benefiting from the laborious reinsurance market and improved phrases and situations.”
A number of reinsurers had smaller however nonetheless notable actions within the rankings. For instance, Tokio Marine rose from No. 38 to No. 34, with GPW growing 11.6% – a quantity that was dampened by the 8.0% depreciation of the Japanese yen towards the US greenback. Nevertheless, when utilizing international alternate charges in keeping with year-end 2021, AM Greatest stated that non-life GPW rose 21.5% year-on-year.
5 firms moved up three positions. Arch rose from No. 17 to No. 14, pushed by 36.4% progress in non-life GPW. MS&AD moved from No. 18 to No. 15, pushed by 17.3% progress in non-life GPW (regardless of being dampened by the 8.0% depreciation of the yen). Sompo Worldwide Holdings moved from No. 20 to No. 17, pushed by 6.9% GPW progress. MAPFRE Re moved from No. 21 to No. 18 on 3.5% premium progress. Lastly, Assicurazioni Generali rose from No. 22 to No. 19 on 4.1% premium progress.
Forex alternate charge fluctuations have a significant influence on firms’ rankings, AM Greatest famous. These currencies with the best dampening impact on international reinsurers’ premium quantity in 2022 had been the Japanese yen, which depreciated by 8.1% towards the US greenback; South Korea’s received, which depreciated by 6.2%; the euro (5.7%); and the Canadian greenback (5.6%).
Reducing Property-Cat Publicity
Bermuda-based Fidelis, which was a brand new entrant in 2021, dropped out of the highest 50 rating as the corporate is working to chop its property-catastrophe publicity. “Fidelis had vital property-catastrophe losses in each 2021 and 2022, with a mixed ratio over 110 in each years.”
AXA XL, which additionally has pulled again from property-catastrophe reinsurance because it seems to be to reduce volatility in its enterprise, has dropped from No. 16 to No. 21 within the rankings, AM Greatest stated.
Notable Adjustments, New Entries
Wanting ahead, AM Greatest expects “Renaissance Re could have a notable rating change as soon as its acquisition of Validus from AIG is accomplished.” Together, the 2 entities had gross life and non-life premiums written of US$12.3 billion at year-end 2022, which might be ranked No. 10.
AM Greatest stated two new reinsurers entered the highest 50 record this yr – Convex Group and Core Specialty Insurance coverage Holdings, ranked at No. 40 and No. 44, respectively.
Convex, the Bermuda-based specialty re/insurer, was based in 2019, whereas Core Specialty, the newly recapitalized carve-out of StarStone, was launched in December 2020, “following in depth enlargement of fairness funding and new govt hires.”
Non-Life Rankings
Commenting on developments in international non-life reinsurance teams, AM Greatest famous that Hannover Re overtook Swiss Re within the No. 2 place after almost tripling Swiss re’s non-life premium progress.
The highest 15 international non-life teams are Munich Re, Hannover Re, Swiss Re, Lloyd’s, Berkshire Hathaway, SCOR, Everest Re Group, RenaissanceRe Holdings, China Reinsurance (Group) Corp., PartnerRe, Arch Capital Group, Korean Reinsurance Co., Basic Insurance coverage Corp. of India, Sompo Worldwide Holdings and Odyssey Group Holdings. (See exhibit 3 beneath).
A lot of the adjustments in non-life rankings had been seen in firms between No. 11 and No. 15 on the record, AM Greatest confirmed. For instance, Arch Capital rose from No. 15 to No. 11, displacing Korean Re, which fell barely from No. 11 to No. 12.
“Two firms included in final yr’s high 15 fell off the record this yr: AXA XL, which pulled again from property disaster reinsurance, and Transatlantic Holdings Inc., which was consolidated into Berkshire Hathaway,” in keeping with the rankings company.
The brand new entrants to the highest 15 non-life record embody Odyssey Group, ranked at No. 15, and Sompo Worldwide, ranked at No. 14.
Methodology
AM Greatest defined that solely year-end gross reinsurance premiums written are calculated, eliminating any main premiums, with the intention to isolate a reinsurer’s enterprise profile. Rankings previous to 2021 had included main premiums that had been lower than 25% of a reinsurers’ complete premium quantity.
“To acquire essentially the most correct figures attainable, we make a lot of assumptions and changes as we navigate via totally different monetary statements, accounting requirements, and section reporting. Capturing solely third-party enterprise and excluding affiliated or intragroup reinsurance are maybe essentially the most important changes,” AM Greatest stated.
All reporting currencies are transformed to US {dollars}, utilizing the international alternate charge as of the date of the businesses’ monetary statements.
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