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Net premiums up, but combined ratio deteriorates for RAA’s cohort of reinsurers

19th November 2021 - Author: Luke Gallin

The latest data from the Reinsurance Association of America (RAA) shows that a group of 17 U.S. property / casualty reinsurers wrote $57.3 billion of net premiums during the first nine months of the year, although the group’s combined ratio deteriorated slightly to 100.7%.

growthNet premiums increased from the $49.3 billion reported for the same period last year, while gross premiums written increased from $61.9 billion in 9M 2020 to $72.1 billion this year.

Highlighting the elevated catastrophe experience, including winter storm Uri in Q1, and hurricane Ida and the European floods in Q3, as well as some other weather-related losses and ongoing, albeit lesser impacts from the COVID-19 pandemic, losses and loss adjustment expenses (LAE) increased to $40 billion.

The loss ratio moved from 75.5% in 9M 2020 to 76.6% in 9M 2021, while the group’s expense ratio moved from 24.7% in 9M 2020 to 24.1% this year.

Overall, the group of reinsurers reported a combined ratio of 100.7% for the first nine months of 2021, which is a slight deterioration from the 100.2% reported for the prior year period.

The combined ratio reflects an underwriting loss across the group of $1.6 billion for 9M 2021, compared with $897 million for the same period a year earlier.

On the asset side of the balance sheet, the group reported a year-on-year improvement as investment income hit $8.5 billion in 9M 2021, against $7.1 billion in 9M 2020.

All in all, the group of 17 U.S. property / casualty reinsurers recorded net income of $8.1 billion for 9M 2021, which is an increase from income of $6.2 billion in the prior year.

Year-on-year, policy holder surplus also increased, from $215.2 billion in 9M 2020 to $257.6 billion in 9M 2021.

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