Reinsurance weathers catastrophe losses

According to Willis Re, reinsurers have weathered 2017's exceptional natural catastrophe losses.

According to the biannual Reinsurance Market Report from reinsurance broker Willis Re, reinsurers have weathered the exceptional natural catastrophe losses of 2017, with capacity remaining stable.

The broker’s Reinsurance Index, which tracks the performance of reinsurance companies, found that shareholders’ equity in 34 reinsurers was up by a factor of 7.8 per cent at the end of last year - despite 2017 being, in the words of Willis Re’s Global CEO James Kent, ‘one of the worst years on record for insured natural catastrophe losses’. The weighted combined ratio for those reinsurers tracked by the Index was 104.8 per cent, a 10.4-per-cent increase compared with 2016.

Despite the ferocious Atlantic hurricanes and other disasters that drove major losses in 2017, Kent said that ‘today the global reinsurance market is able to deploy more capital than at the same time last year’: “When a few exceptional transactions are considered, total reinsurance capacity is roughly stable, despite the hurricanes, earthquakes, wildfires and other events which brought misery to millions of people. That’s a significant achievement for the reinsurance market, and a testament to its strength.”

However, he warned that pressure on traditional reinsurers from suppliers of alternative capital ‘is stronger than ever’, and continuing to dampen price increases in the mid-year renewals.