Munich Re and Swiss Re Both Top List of Largest Reinsurers in 2023

Munich Re tops the list of the world’s 50 largest reinsurers using IFRS 17 reporting standards, while Swiss Re is the largest non-IFRS 17 reinsurer, according to AM Best.

Among the largest reinsurers reporting IFRS 17, Munich Re is followed by Hannover Re and SCOR at number two and three. Leading the list of non-IFRS-17 reinsurers are Swiss Re, Berkshire Hathaway and Lloyd’s. (See chart below).

In last year’s top 50 – pre-IFRS accounting rules – Munich Re ranked as the largest reinsurer, while Swiss Re followed in second place.

The change from IFRS 4 to IFRS 17 has diminished comparability between reinsurers and shifted the traditional focus of reinsurers’ financial statements from premiums written and earned to one based on insurance revenue, AM Best explained in its report titled “The 50 Reinsurers the biggest in the world. ” (International Financial Reporting Standard 17 – IFRS 17 – entered into force on January 1, 2023).

AM Best noted that the global reinsurance industry is in the midst of a “generational sustainability market” that has driven significant growth for many reinsurers. As a result of this turn of fortune, AM Best in June revised its outlook for the reinsurance sector to positive from stable, the first time the rating agency has a positive outlook on the segment.

“Tough market conditions reignited by Hurricane Ian and substantial secondary hazard events in 2022 resulted in continued significant rate increases as well as a tightening of terms and conditions that continued through the 2023 renewals,” the report said.

“Additional factors in 2022 – such as unrealized losses of fixed income investments at market value, cost of losses and social inflation and global macroeconomic uncertainty – have caused a substantial imbalance in reinsurance supply and demand dynamics,” continued AM Best. “In aggregate, these factors resulted in significant growth in premium volume, underwriting revenue and net income.”

As a result of these challenging market dynamics, top-line growth in the reinsurance segment was strong throughout 2023, AM Best said, noting that for the top 35 non-IFRS 17 companies, total gross reinsurance premiums written increased by over 6% last time. year, “mainly driven by strong rate increases rather than increased exposure.”

“Despite global investment market turbulence and severe global catastrophe losses, many reinsurers reported strong underwriting results, which were complemented by a significant increase in fixed income investment returns driven by increases in reinvestment rates,” it said. shows in the report.

Reinsurers’ performance continues to be supported by strong rates, tight terms and conditions and high attachment points, AM Best continued. At the same time, there is little indication that “market underwriting discipline is waning.”

Analyzing the results of some of the leading companies, AM Best said, Munich Re and Swiss Re remain the largest reinsurers worldwide under the various accounting standards. (Comparisons will be easier when Swiss Re switches to IFRS for financial year 2024).

In order to classify reinsurers in one list, AM Best noted that there has been a significant negative movement for IFRS 17 reporters. As a result, users of the reinsurer list should refer separately to the rankings in the non-IFRS 17 and IFRS 17 columns of the graph, AM Best explained.

• Munich Re reported GPW of $51.3 billion in 2022. (This included global specialty insurance, which was removed from gross revenue for 2023). Excluding its global specialty insurance business, Munich Re’s third-party reinsurance revenue reached $32.9 billion in 2023.
• Swiss Rewhich is the largest of non-IFRS 17 reporting companies, had gross life and non-life premium growth of 1.9% in 2023, driven by life premium growth of 5.8%, as which non-life premiums fell slightly by 0.7%. Swiss Re’s gross non-life premium rose 2.7%.
• Berkshire Hathaway reported a 24% rise in third-party reinsurance premiums to $27.5 billion in 2023, up from $22.1 billion in 2022. AM Best noted that the group acquired Alleghany in late 2022 for 11 $.6 billion in a deal that included TransRe, which wrote gross premium of $5.9 billion in 2023, up 2.5% from $5.8 billion in 2022.
• Hanover Re reported a 4.9% increase in gross reinsurance revenue from 2022 adjusted for exchange rates. Gross reinsurance income for general reinsurance increased by 6.5% compared to 2022.
• Lloyd’s saw premium growth of 19.1% from $18.5 billion to $22.1 billion. The rise benefited from the pound’s depreciation against the dollar, AM Best said. “Using consistent exchange rates, growth reached 7.2%.”
• Everest Re saw significant growth, with gross premiums up 23% to $11.5 billion from $9.3 billion.
• RenaissanceRe replaced Everest in the overall ranking with a 33.9% increase, which includes the impact of the acquisition of Validus Re.
• Convex reported gross premiums up 48.6% from $1.4 billion in 2022 to $2.1 billion in 2023. “Established in 2019, the group is still relatively new but has grown rapidly, with surplus nearly doubling against its initial start-up capital in 2023. The company achieved underwriting profitability three years after inception,” said AM Best, adding that Convex was included in the 2023 Global Top Reinsurers report for the first time.

On the other hand, not all reinsurers reported growth during the tough market, AM Best confirmed. For example, SiriusPoint saw a 16.5% drop in premiums, reporting $1.3 billion in 2023 from $1.5 billion in 2022. Markel also reported a 15% drop in gross premiums to $1.0 billion from $1.2 billion in 2022.

We are entering the list

New entrants to the list of largest reinsurers were Ascot Group and Ark Insurance Holdings. Founded in 2001, Bermuda-based Ascot now ranks 26th^th among non-IFRS 17 companies. It is a global specialty reinsurer focused on catastrophe risks in the United States.

Another addition to the list is Ark Insurance, now ranked 34th^th among non-IFRS 17 companies. Founded in 2007, Ark is a property, casualty and specialty reinsurer operating through a Lloyd’s platform.

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Reinsurance