Global re/insurers hike 9M underwriting gains despite nat cat hit; commercial pricing outpaces all

Global re/insurers managed a bump in nine-month underwriting profits despite a hefty hit from Q3 2021 catastrophe losses, a factor which could yet lead market pricing for some time, analysts at  Willis Re said in quarterly research.

Premium growth proved universal in the swath of the industry under the Willis Re review, with half of the studied firms even managing double digit growth rates, according to the report titled “Global (re)insurance: Nine-month results impacted by nat cats, but growth and underlying profitability are robust.”

Premium growth proved "largely fueled by continued favorable pricing for commercial lines business and the improving economic environment" post-pandemic, authors wrote.  Rate increases for reinsurance and retail insurance drove gains "to a lesser extent."

Intact topped the 9M P&C premium growth leader board on consolidations. Everest Re, Arch Capital followed with growth rates clearly above the 20 percent mark. Fairfax, Markel and Hannover Re followed closely behind.

Nat cat trends will determine the longer-term pricing trend, once the industry gets a better handle on whether the 5Y run-up in losses is trend or bump.

“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),” analysts wrote.

9M underwriting results improved despite the much-discussed Q3 2021 catastrophe losses.

Combined ratios came down by 3.5 percentage points to 95.8% from a prior year period more heavily packed with Covid losses, the report said.

"However, it is evident that higher premium growth from the economic rebound and ongoing favorable expense trends continuing post-COVID have helped combined ratios in 2021," authors noted.

Q3 combined ratios proved higher at 99.9 percent after European floods and Hurricane Ida, authors claimed.

Rising solvency for European players looks supportive of not only growth in what is considered an attractive market, but probably shareholder remuneration as well, analysts said.

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