Brazilian reinsurer IRB (Re) has reported its best underwriting result since 2019, as an improved portfolio performance on the back of better pricing and exposure reduction resulted in underwriting profit of approximately USD 31 million (R$ 155m) in 2023.
The reinsurer’s underwriting performance in 2023 marks a considerable turnaround from the loss of roughly USD 300 million (R$ 1.5bn) reported in 2022, supported by a positive underwriting outcome in each quarter of the year, including income of roughly USD 21 million (R$ 105m) in Q4 2023.
The firm’s combined ratio strengthened by a significant 28 percentage points to 109% in 2023. The combined ratio fell from 111% in Q1 2023 to 104% in Q4 2023, with the P&C combined ratio, which excludes one-off LPT effects, actually coming in at 96% for Q4 2023.
The improvement in the combined ratio reflects a huge decline in the loss ratio from 104.3% in 2022 to 70% in 2023, reflecting losses of USD 1.1 billion (R$ 5.3bn) and USD 580 million (R$ 2.9bn), respectively. IRB (Re) attributes the lower loss ratio to better portfolio pricing and risk selection.
In terms of growth, the company has reported gross written premium of approximately USD 1.3 billion (R$ 6.5bn) in 2023, down 17% on the USD 1.6 billion (R$ 7.9bn) reported in 2022, which is line with the reinsurer’s strategy of “cleaning up the portfolio” throughout the year as it targets a better quality portfolio.
Following the operational changes that the carrier made, net income for 2023 hit USD 23 million (R$ 114m), reversing the loss of USD 127 million (R$ 630m) seen in 2022.
