Reinsurance News

Fitch views RGA’s market position ‘favourably’

11th April 2023 - Author: Akankshita Mukhopadhyay

Fitch Ratings views the Reinsurance Group of America’s (RGA) entrenched market position and long track record in the global reinsurance market “favourably”.

Fitch-RatingsThis news follows Fitch’s outlook revision for RGA to positive from stable. Fitch said that this outlook revision reflects RGA’s business profile improvement as the largest provider of individual and group life reinsurance in North America, as well as being one of the leading life & health reinsurers in the world.

“Further, RGA’s underwriting experience improved materially in 2022 as Covid-19 significantly lessened compared with 2021, which Fitch Ratings expects to persist in 2023,” the rating agency noted.

According to a recent Fitch peer review, the ratings of the Midsize Niche North American Life Insurers peer group are driven by their differentiated business profiles.

RGA participates in the North American ordinary life recurring premium markets, whilst Wilton Re, Fortitude Group Holdings, Security Life of Denver Insurance (SLD), and Resolution Re are primarily focused on acquiring runoff insurance blocks.

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The review suggests Wilton Re has a long track record in the runoff market, with demonstrated pricing expertise.

Fortitude Re’s initial balance sheet consisted solely of legacy liabilities assumed from American International Group (AIG), but the company has grown through acquisitions of runoff life insurance, annuities, and property/casualty business.

Fitch expects the peer group to continue to pursue opportunistic growth domestically and abroad.

“Fortitude Re and RGA recently completed reinsurance transactions of whole life insurance in Japan. In June 2022, Resolution Re reinsured $1.5 billion of whole life reserves in Japan.”

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