The Reinsurance Association of America (RAA) has released data on the performance of 18 U.S. property and casualty (P&C) reinsurers during the first-half of 2018, revealing a combined net income of $5.1 billion, compared with a net loss of $286 million a year earlier.
Gross premiums written (GPW) increased from $33 billion in the first-half of 2017 to $37 billion this year, with net premiums written (NPW) increasing also, from $22.5 billion in H1 2017 to $30.1 billion this year, likely driven by companies’ taking advantage of price increases following the catastrophe events and subsequent losses of last year.
Overall, net income jumped from a loss in the first-half of last year, driven mainly by a $1.4 billion loss at National Indemnity, to a $5.1 billion gain in H1 2018, although again, this appears to have largely been driven by National Indemnity, which recorded net income of $4.7 billion during the period, according to the RAA’s figures.
Investment income also increased for the group of 18 P&C players, from $3.8 billion in the first-half of 2017, to $4.8 billion this year.
Net underwriting profits did fall, however, from $244 million to $219 million, year-on-year. The group recorded a combined ratio of 96.1% during the first-half of this year, which is an improvement on the 97.1% recorded a year earlier.
As with last year, other income again fell to a loss in H1, of $111 million, although this is significantly down on the $5.9 billion other income loss recorded a year earlier, although, this was again driven by National Indemnity which reported an other income loss of $5.9 billion in H1 2017.
The group’s expense ratio jumped from 24.3% in 2017 to 26.1% this year, while the loss ratio moved from 72.8% to 70%, year-on-year.
Market players appear to have taken advantage of reinsurance rate increases that have been evident so far in 2018, growing their books while increasing profitability during improved, but still very challenging and competitive times.
With rates in the sector already fading from the January renewals, it will be interesting to see how the group of 18 U.S. P&C players perform in the second-half of the year, especially if catastrophe activity picks up.
