All material subject to strictly enforced copyright laws. © 2021 Insurance Insider is part of Euromoney Institutional Investor PLC.
Accessibility | Terms & Conditions | Privacy Policy | Modern Slavery Act | Cookies | Subscription Terms & Conditions

Global reinsurers post divergent Q2 top line movements

The Insurance Insider's group of global reinsurers posted contrasting top line strategies for their P&C reinsurance divisions in the second quarter, as some chose to scale back their expos

Global aggregate GWP
ure while others found growth opportunities.

Counterbalancing individual top line changes left the aggregate's Q2 P&C reinsurance gross written premiums (GWP) relatively flat year-on-year at $14.8mn, using a five-year average exchange rate. This was just 0.4 percent below the same period of last year.

However, two reinsurers posted double-digit GWP growth rates versus just one in Q2 2016, while two others posted top line decreases - one less than a year before.

Double-digit expansions

Hannover Re's P&C reinsurance top line grew by 22.9 percent year-on-year in the quarter to EUR2.6bn ($3.1bn) - the strongest growth rate among the group.

Hannover renewals

In the second quarter, the carrier's P&C casualty treaty renewals yielded a 9.7 percent increase in volume to EUR1.3bn, with 6.9 percentage points stemming from new business and the rest attributed to price and volume changes on renewed premiums.

Hannover Re also noted that its North American premiums increased by around 15.0 percent as the company upped its participation in several core property accounts amid moderating rate pressures.

Meanwhile in casualty, strong competition limited further extension of coverages, but there was some top line growth in new cyber business.

CEO Ulrich Wallin noted: "We also saw some growth on our US casualty business, however, no new large traditional transactions here. We found that the casualty business actually remained quite competitive."

The executive added that structured reinsurance business "saw significant growth" at the July renewals, "which was even more pronounced than the traditional business".

At Everest Re, P&C reinsurance premiums were up by 13.7 percent year-on-year to $1.0bn in Q2.

In the US, the company's top line expanded by 17.1 percent to $475.0mn due to a new crop treaty, CEO John Doucette said.

Everest Re cessions

The crop premium added $54.0mn of premiums, the executive continued, and was "associated with our strategic crop reinsurance relationship that resulted from the sale of Heartland last year".

Meanwhile, international reinsurance premiums were down 6.1 percent to $319.8mn, "partly due to some large one-off deals with strategic clients written in the prior year", according to Doucette.

But Everest Re's strongest divisional reinsurance top line growth was in Bermuda, where it advanced by 46.7 percent to $237.6mn.

"The growth was derived from new product opportunities, timing of certain accounts, additional pro rata treaties in property, credit and casualty lines, increased writings in UK motor, post-Ogden rate changes and some large multi-class programmes with core clients," Doucette noted.

Scor renewals

In Europe, Scor posted a 9.6 percent climb in its P&C reinsurance segment to EUR1.6bn ($1.9bn) for the three months to 30 June.

Large US contracts written in the second half of 2016 contributed to the top line increase, the company said.

Looking at the June and July renewals, gross premiums rose by 4.7 percent to EUR 547mn. Credit and surety business grew by 66.0 percent to EUR34mn but the total US cat portfolio reduced by 8.0 percent to EUR77mn.

The US book was roughly flat after growing substantially earlier this year, Scor said. In the US, growth in select segments was offset by property portfolio management actions and the decision to reduce risk with Florida-focused monoline carriers.

Top line decreases

At the other end of the spectrum, P&C reinsurance premiums dropped by 8.0 percent at Munich Re to EUR4.2bn, their lowest level since Q2 2014.

Munich top line

This was the reinsurance giant's strongest Q2 top line contraction since at least 2010, when the reported year-on-year movement was a drop of 5.0 percent.

CFO Jörg Schneider noted that the top line reduction was "due to the 1 January renewal, where we showed a substantial decline, and this is now translated into the growth premium".

"You will see some reversal trend in the third quarter and the fourth due to the very positive outcome of the July renewal," the executive added.

Munich Re's approach to growing its book was "not to stupidly take down the profitability requirements, but to more selectively and more aggressively go for risks where we have an increased confidence in our data over time, and that we should translate this increased confidence into more business," Schneider said.

However, in its H1 report, the reinsurer noted that P&C reinsurance GWP erosion was caused by fewer treaty shares and "the targeted withdrawal from unprofitable business".

The largest top line contraction in the global reinsurers cohort was at Swiss Re, where P&C reinsurance premiums dropped by 11.9 percent to $3.6bn in the second quarter.

Swiss Re renewals

This was the segment's biggest year-on-year top line reduction since 2010, when GWP decreased by 15.0 percent from the prior-year period.

"We stick to very strict underwriting discipline and cut the worst-priced business, and that obviously will improve the quality of the business," said CUO Edouard Schmid in a conference call with analysts.

At the April renewals Swiss Re saw a 4.0 percent decrease in premiums to $1.8bn, while at the July renewals it recorded a greater drop of 10.0 percent to $3.4bn.

"Rate decreases in property, including nat cat, and specialty continue to slow down, while casualty rates remain generally more stable, with significant differences by market and product," the company said.

Global top line movements

 

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree