Munich Re reclaims top spot in AM Best ranking

Munich Re reclaimed the No. 1 position from Swiss Re in AM Best’s 2018 annual ranking of the Top 50 Global Reinsurance groups.

Outside of 2017, when Swiss Re held the top spot, Munich Reinsurance Company has held the top spot each year since 2010, as detailed in the new Best’s Market Segment Report, “Global Reinsurance: Optimism Fizzles, It’s Back to the ‘New Normal.’” The 2018 ranking is based on reinsurance gross premiums written, with Munich Re and Swiss Re comprising approximately 30 percent of the Top 50 total.

Berkshire Hathaway moved up two spots from last year’s ranking to No. 3, pushing Hannover Re and SCOR SE to the four and five spots, respectively. The nearly $10 billion reinsurance agreement between Berkshire Hathaway’s National Indemnity and American International Group (AIG) primarily drove Berkshire Hathaway’s jump in the ranking.

Although the agreement between the two companies was finalized in January 2016, it was not accounted for until first-quarter 2017. Despite dropping in the ranking, Hannover Re and SCOR experienced year-over-year double-digit gross premiums written growth.

The bottom half of the Top 10 positions remained unchanged from the previous year. Overall, the Top 10 reinsurance groups make up slightly more than 70 percent of the total gross premium written in the Top 50 ranking.

“The amount of gross premiums written by the Top 10 in AM Best’s ranking reinforces the sentiment that the industry’s largest reinsurers continue house disproportionately sizable amounts of risk, despite cedants’ efforts to diversify their reinsurance panels and spread out their counterparty risk,” said Robert DeRose, AM Best senior director.

Merger and acquisition activity continues to influence the rankings, including the most dramatic change in the 2018 ranking, as Sompo Holdings jumped from No. 22 from No. 46.

Year-end 2017 was the first year that Endurance Specialty Holdings (now Sompo International Holdings) was consolidated into Sompo’s financial reporting, leading to an estimated 265 percent increase in the company’s life and non-life gross premium written.

The Top 50 reinsurance groups recorded an average combined ratio in 2017 of 109.1 percent, mainly due to catastrophe losses. The Top 5 average combined ratio was slightly higher at 109.7 percent, which echoes the segment’s results and reinforces the syndicated nature of the sector.

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