Reinsurance Premium Growth Is Strong for 2021: Willis Re

Despite higher catastrophe losses in the third quarter, a group of re/insurers tracked by Willis Re reported improved combined ratios through the first nine months of the year, and half of the cohort achieved double-digit premium growth.

Source: Reinsurance News | Published on November 23, 2021

Willis Re's recent report, which examines the 9M 2021 performance of the world's largest re/insurers with meaningful commercial lines or reinsurance operations, highlights robust premium growth as a result of pricing and improving economies.

Premium growth was driven primarily by continued favorable pricing for commercial lines business and an improving economic landscape across the cohort for both the nine-month period and the third quarter.

Reinsurer Intact leads the way in premium growth for both 9M and Q3 2021 as a result of its acquisition of RSA's Canadian and UK operations.

In addition to year-on-year premium growth, the group of re/insurers reported an average combined ratio of 95.8 percent for 9M 2021, down from 99.3 percent the previous year.

"While rates are likely outpacing loss cost trends for most lines of business, YOY trends are not good guidance for underlying accident year loss ratio improvement with the COVID effects of last year."

"However, it is clear that higher premium growth from the economic rebound, as well as ongoing favorable expense trends continuing post-COVID, have aided combined ratios in 2021," the reinsurance broker says.

Following a more benign second quarter, re/insurers saw an increase in catastrophe experience in the third quarter, as hurricane Ida battered parts of the United States and flooding devastated parts of Europe in July.

While these higher losses were partially offset by lower COVID-19-related losses and favorable reserve development, the group's Q3 2021 combined ratio fell to 99.9 percent, compared to 99.4 percent in the same period last year.

“We expect the recent experience and trend to continue to drive a heightened focus on modelling exposure (particularly for secondary perils and climate change), the sufficiency of reinsurance (or retrocession) protection in place, and whether exposures are being adequately reflected in price (both in original and reinsurance terms),” says the broker.