New data released by The Reinsurance Association of America (RAA) shows an increase in both profitability and net premiums for US property and casualty (P&C) reinsurers over the first half of 2021.
The data, collected by RAA from 17 reinsurers globally, shows a marked improvement in the combined ratio of the group between H1 2020 and H1 2021, moving from 98.4% to 96.8%.
At the same time, net premiums rose from $32.1 billion last year to $37.1 billion for the six-month period in 2021.
RAA attributed the improvement in the group’s combined ratio to a favourable change in the loss ratio, which came to 72.4% for H1 2021, versus 73.4% for the same period last year. The expense ratio also improved slightly from 25.0% to 24.4%.
The data further shows that policyholders’ surplus was $256.8 billion, compared to $237.8 billion at March 31, 2021.
Of the reinsurers included in the Q1 survey, American Agricultural Insurance Company achieved the lowest combined ratio at 90.1%, whilst the highest was posted by Sirius America Insurance Company at 110.1%.
But despite the improved profitability in recent months, eight out of the 17 reinsurers analysed by RAA still turned an underwriting loss during H1, and six posted an overall net loss for the period, namely AXIS Re, Endurance Re, Munich Re America, RenRe US, Sirius America, and Swiss Re America.
This compares to the H1 2020 period, when 15 out of the same 17 reinsurers posted an underwriting loss, and eight posted an overall net loss.
The aggregate underwriting gain for the group was $275.7 million in H1 2021, versus just $29.8 million last year, while aggregate net income came to $7.1 billion this year, compared with $2.7 billion previously.
National Indemnity Company saw the biggest underwriting gain in H1 at $647.2 million, as well as the largest net income figure at $6.3 billion, making up the majority of the aggregate result. In contrast, Munich Re America turned the largest underwriting loss at $320.0 million and also the largest net loss at $90.5 million.