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Investment Losses Swamp Reinsurers' Six Month Net Results

Source: RAA, Trading

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Posted on 02 Sep 2009

The Reinsurance Association of America (RAA) has released reinsurance underwriting results for six months ended June 30, 2009.

The group of 19 U.S. reinsurers followed by the RAA posted a profitable 93.8 combined ratio for the first six months of the year, but investment losses dragged the group into the red.

The group posted a combined net loss of $406.3 million for the first half of 2008, even though only five of the 19 companies reported individual net losses. Berkshire Hathaway’s National Indemnity Co., which represents about 43% of the group's $65.99 billion in policyholders' surplus, reported a net loss of $1.29 billion with $2.49 billion in net realized capital losses.

Only four companies squeaked out net realized capital gains for the first six months. They were: American Agricultural Insurance Co., Platinum Underwriters Reinsurance, Swiss Reinsurance America Corp. and XL Reinsurance America.

The RAA reported policyholders' surplus for the group fell 9% to $65.9 billion from $72.8 billion for the same period in 2008. The group wrote $12.8 billion of net premiums -- up slightly from $12.7 billion for the same period in 2008.

The reinsurers' combined ratio was 93.8, an improvement from the 97.5 reported by a similar group of reinsurers for the six months ended June 30, 2008.


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