The world’s 50 largest reinsurance companies

The global reinsurance market remains robust, with the 50 largest reinsurers posting an almost 10% rise in combined gross written premiums (GWP), which amounted to US$353 billion (approx. CA$459.6 billion) in 2021, up from US$321 billion (approx. CA$417.9 billion) in the previous year, the latest market segment report from AM Best has revealed.

The credit reporting agency attributed the upsurge to pricing increases, with the majority of reinsurance companies disclosing that between a third and half of their premium growth was because of rate increases. The spike in prices is expected to continue in 2023, according to AM Best, although the amount is predicted to vary, depending on the business line and territory.

The firm warned, however, that the rise in GWP could be offset by the drop in property catastrophe premium as many reinsurers have begun shrinking their exposure to – if not withdrawing completely from – the market.

The appreciation of the US dollar against most other currencies, including the euro, has also dampened premium volume for several reinsurance companies.

Despite the significant catastrophe losses – most of which stemmed from secondary perils – the top 50 reinsurers posted an average combined ratio under 100 for the first time in five years. The average combined ratio of the 10 largest firms was 99.2 last year, significantly better than the 104.9 registered in 2020.

Top reinsurers retain leading spots

The three largest reinsurers from the last year retained their spots, with Munich Re, which clinched first place in 2021 following the exclusion of primary premiums in the rankings, remaining at the top of the list. The Germany-based company posted a 10.8% rise in GWP, driven exclusively by the expansion of its property and casualty (P&C) segment.

Securing the number two spot is Swiss Re. The Switzerland-based reinsurer saw premium growth in both its P&C (8%) and life and health (7%) segments. Munich Re and Swiss Re accounted for 24.3% of the top 50 firms’ GWP in 2021, down slightly from 25.6% from the year prior, likely due to the depreciation of the euro.

Hannover Rück SE also maintained its position at third after seeing premium volume jump by 12%. Growth was driven by the German reinsurer’s P&C segment, which rose more than 16% because of “favourable pricing trends.”

Although the top three were the same as last year, there was notable movement among the other companies in the top 10. Canada Life Re moved up to the fourth spot from number eight last year, leapfrogging SCOR, Berkshire Hathaway, China Re, and Lloyd’s. It also marked the first time that a solely life reinsurance group made the top four. Canada Life re-entered several new long-term reinsurance agreements, including a multi-billion-dollar block transfer of Japanese whole life policies and a deal to reinsure pension liabilities in the Netherlands and the UK last year.

Korean Re, which held tenth place in 2020, dropped to the 13th spot, owing to currency fluctuations. Despite premium growth of about 7%, China Re, in sixth place in 2021, slipped back to eighth, the position it held in 2020.

Also enjoying growth in GWP is Berkshire Hathaway at 3.5% – although the Warren Buffett-owned firm slipped one spot to sixth place – and UK insurance marketplace Lloyd’s at 17.2%, retaining its spot at number seven. France-headquartered SCOR slid to fifth from fourth last year, after a 1% decline in premium volume.

The 10 largest reinsurers in the rankings accounted for slightly over two-thirds of the total GWP at 67.9%, a marginal decline from 68.5% in 2020.

The world’s 50 largest reinsurers ranked

According to AM Best, the rankings are meant to “isolate a reinsurer’s business profile” using GWP.

To obtain the most accurate figures possible, the credit reporting agency said it made several “assumptions and adjustments as [it] navigated through different financial statements, accounting standards, and segment reporting,” with the most essential adjustment being “capturing only third-party business and excluding affiliated or intergroup reinsurance.”

AM Best also converted all reporting currencies to US dollars using the foreign exchange rate as of the date of the reinsurers’ financial statements. The firm said currency exchange rate fluctuations have a “meaningful effect” on the rankings.

When financial statements and supplemental data did not provide a proper breakdown of premiums, however, AM Best obtained information directly from the reinsurer, but cautioned that this may be unaudited.

Here are the 50 largest reinsurance companies in the world, according to the credit reporting agency’s annual report.

Source: AM Best, Best’s Market Segment Report 2022

To know what are the largest reinsurance companies in Canada, read here.