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P&C reinsurers see profit & premium improvement: RAA

11th March 2022 - Author: Matt Sheehan

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 2021.

Reinsurance Association of AmericaThe data, collected by RAA from 17 reinsurers globally, shows that the combined ratio for the group improved to 99.8% last year, down from 101.4% in 2020.

At the same time, the P&C reinsurers wrote $74.6 billion of net premiums, up from $65.1 billion in the previous year.

RAA attributed the improvement in the group’s combined ratio to a favourable change in the loss ratio, which came to 75.3% in 2021, compared with 76.5% in 2020.

The expense ratio also improved slightly to 24.5%, compared with 24.9% in the previous year.

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The data further shows that policyholders’ surplus was $289.6 billion, an improvement on the previously recorded $257.6 billion.

Of the reinsurers included in the survey, XL Reinsurance America achieved the lowest combined ratio at 89.2%, whilst the highest was posted by EMC Re at 125.3%.

And despite the overall improvement in results, nine out of the 17 reinsurers analysed by RAA still posted a combined ratio above 100% for 2021. Only four of the group fell to a net loss for the year, namely AXIS Re, EMC Re, Munich Re America and The Toa Reinsurance Company of America.

For comparison, in 2020 thirteen of the P&C reinsurers in the group posted a combined ratio above 100%, and seven posted a net loss for the year.

In aggregate, the group turned a net underwriting loss of $787.8 million, an improvement on 2020’s loss of $1.5 billion, while net investment income came to $9.9 billion, down from $10.5 billion previously.

National Indemnity reported the biggest underwriting gain in 2021 at $735.2 million, as well as largest investment income at $7.5 billion and the largest net income at $10.0 billion. In contrast, Munich Re America recorded by far the largest underwriting loss at $1.8 billion, in addition to the largest net loss at $730.0 million.

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