Best’s Market Segment Report: U.S.-Bermuda Reinsurers’ Technical Results Improve Amid Investment Losses

Despite deterioration in overall profitability, U.S. and Bermuda reinsurers collectively reported improved underwriting results for 2022 and a second straight year of top-line growth, according to a new AM Best report.

The Best’s Market Segment Report, “U.S.-Bermuda Reinsurers’ Technical Results Improve Amid Investment Losses,” is part of AM Best’s look at the global reinsurance industry ahead of the Rendez-Vous de Septembre in Monte Carlo. Other reports, including AM Best’s annual ranking of the Top 50 global reinsurance groups and in-depth looks at the insurance-linked securities, Lloyd’s, life/annuity, health and regional reinsurance markets, will be available during August and September.

According to this report, AM Best’s composite of 21 reinsurance groups domiciled in the U.S. or Bermuda experienced net premium growth of 16% in 2022, following a 20% gain in 2021. This growth reflected an improved rate environment for most business lines, particularly property exposures. AM Best projects that premiums for the composite will further increase in 2023, as demand remains high, and rates in key lines of business continue to rise, particularly for catastrophe-exposed business.

“These favorable trends, combined with catastrophe activity that impacted primary carriers more than reinsurers during the first half of the year, suggest that the composite should be able to sustain, and even improve upon 2022 results,” said Greg Dickerson, director, AM Best.

Despite the high natural catastrophe activity, the composite’s 2022 accident year (excluding prior year reserve development) combined ratio of 94.7 was 7.5 points better than the 102.2 ratio in 2021. The year-over-year improvement was due largely to steady improvement in reinsurance pricing, terms, and conditions.

The report also notes that significant realized and unrealized investment losses led to an aggregate net loss for the U.S.-Bermuda composite in 2022, following positive net income in 2021. The composite posted a -2.4% return-on-equity ratio, versus 10.8% in 2021, when net income benefited from substantial pre-tax realized/unrealized investment gains.

To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=335162.

A video discussion of this report also is available at http://www.ambest.com/v.asp?v=globalreusbermudareinsurance923.

For future global reinsurance reports ahead of Rendez-Vous de Septembre, please visit Best’s Research.

Lastly, AM Best will host its annual reinsurance market briefing at Rendez-Vous de Septembre on Sept. 10, 2023, at 10:15 a.m. (CEST) in Monte Carlo. For more information, please visit https://www.ambest.com/conference/rvds2023/index.html.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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