Validus Re, the Bermuda headquartered global reinsurance arm of American International Group (AIG), grew its gross premiums written by an impressive 40% in the first-quarter of 2023, CEO Peter Zaffino explained today.
Speaking during the AIG earnings call today, AIG CEO Zaffino explained that the reinsurance business has been growing strongly, with Validus Re able to take advantage of market conditions so far this year.
On gross premiums, Zaffino said, “Validus Re had over 40% growth year-over-year due to the exceptional results we achieved with our January 1 treaty placements.”
He continued to say, “Net premiums written were very strong and balanced in Validus Re and we continue to meaningfully improve the quality of the portfolio.
“Improvements were particularly strong in US property, International Property, marine and energy, casualty and specialty lines.”
Rate increases continued to flow through the April reinsurance renewal, with Validus Re and AIG able to capitalise on this.
“With respect to April 1 renewals, across the portfolio gross and net premiums written increased. Within international property, limits deployed were reduced slightly and Japan property cat risk adjusted rates were up approximately 20%,” Zaffino said.
Looking ahead, he explained that growth would not be at any cost though, with Validus Re set to stick to its exposure targets.
“As we consider our deployment strategy at the June 1 renewal cycle, which focuses on US wind exposure, we will continue to maintain a prudent approach on limits deployed.
“We do not expect to deploy additional limits beyond our current aggregate allocated to Florida, although we do anticipate significant rate increases and improvement in terms and conditions,” Zaffino continued.
He went on to say that, like the AIG General Insurance business, Validus Re’s portfolio has been completely re-underwritten with a focus on delivering risk-adjusted returns.
Zaffino closed his comments on Validus Re by saying, “The business had a terrific first quarter, and is well positioned for profitable growth through the rest of the year.”
Also read: AIG reports a GI combined ratio of 91.9% for Q1.
