29 May 2018News

Berkshire becomes top 3 reinsurer, surpasses SCOR and Hannover Re

Berkshire Hathaway became the world's third-largest reinsurer in 2017 driven by the $10.2 billion American International Group (AIG) deal, pushing Hannover Re and SCOR to fourth and fifth place, respectively, according to S&P Global Market Intelligence.

In 2017, AIG entered into an adverse development reinsurance agreement with National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway.

Under the agreement, NICO assumed 80 percent of the net losses and net allocated loss adjustment expenses on the subject reserves in excess of the first $25 billion. NICO’s overall limit of liability under the agreement is $20 billion.

Berkshire collected $10.2 billion premium for reinsuring $20 billion of AIG's old long-tail liabilities.

The deal made Berkshire jump three spots to take its place in the top three global reinsurers with $22.74 billion reinsurance premiums written assumed in 2017. Top 1 remains Munich Re with $35.67 billion reinsurance premiums written assumed, up 2.46 percent year on year, followed by Swiss Re with $29.95 billion, shrinking 4.01 percent year on year.

Hannover Re dropped to the fourth place in the ranking of the biggest global reinsurers with $20.10 billion reinsurance premiums written assumed in 2017 and SCOR ended on fifth place with $16.71 billion, despite growth in both firms' gross reinsurance premiums written.

While Lloyd’s of London was ranked sixth place with $13.61 billion reinsurance premiums written assumed in 2017, the combined AXA and XL Group, which are in a merger process, would have taken the seventh place with a combined $11.75 billion.

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More on this story

News
27 September 2018   Munich Re and Hannover Re have embraced low margin, low volatility growth with a low Solvency II capital cost in 2018, while peers such as SCOR steer clear due to the high S&P rating capital cost, according to Jefferies analysts.
Insurance
27 September 2018   S&P Global Ratings has changed the outlook to stable from negative for Berkshire Hathaway's (BRK's) operating insurance subsidiaries, National Indemnity, Government Employees Insurance, General Reinsurance, and other related insurance subsidiaries due to a more robust capital base.
Insurance
18 September 2018   Berkshire Hathaway Specialty Insurance Company (BHSI) has expanded its leadership team in Dubai with the appointment of AIG, Chubb, AXA, QBE, Allianz and Zurich executives to fill key product line and service posts.