Improved pricing drives reinsurers to 13% premium growth: Gallagher Re

5 December 2022

Reinsurers achieved an average 13% rise in premium growth for the nine months to September, supported by improved pricing for commercial lines and reinsurance business, Gallagher Re says in its latest financial assessment of the industry.

The 25 reinsurers tracked by the Gallagher Re report also posted strong underwriting results, despite returning an average combined ratio of 96.9%, up modestly from 95.5% a year earlier.

“The level of profitability for [the nine months] was supported by continued double-digit premium growth, modestly lower natural catastrophe loss activity, even with the impact from Hurricane Ian… and a reduction in the expense ratio,” Gallagher Re says.

Global reinsurers posted the strongest premium increase of 18.2%, led by Hannover Re (28.9%), Munich Re (25.9%), and Scor. They were supported by growth in traditional treaty and structured reinsurance business and also benefitted from a stronger US dollar.

For the September quarter however, increased loss activity during the period led to a 3.3 percentage point deterioration in the average combined ratio to 102.1% from a year earlier.

Swiss Re and MS&AD reported the most significant deterioration in their combined ratios, stemming largely from natural catastrophe loss activity including Hurricane Ian, and reserving increases related to social and economic inflation.

Gallagher Re says at the nine-month mark of the year, trends in rate increases relative to loss cost inflation remained a key focal point, particularly for personal lines which are widely viewed as needing improved pricing.

Slowing commercial rate rises are a worrying factor as well as investment-driven losses and higher-than-expected natural catastrophe losses.