London:
According to the latest global ranking excercise by international rating agency AM Best,Munich Reinsurance Company, with a total gross premium of $45,846 billion in 2020, moves to the top spot as the world’s largest reinsurer while Swiss Re, with a total gross premium of $36,579 billion in 2020 is no 2 in the latest ranking- for the year 2020, and the two top reinsurers account for just over one-quarter of the total gross premiums written by the companies in the top 50.
The other reinsurers which have made to the AM Best's top 10 global ranking are-Hannover Re(3), with a total global reinsurnace premium of $30,421 billion,Scor(4)with a total global reinsurnace premium of $20,106 billion,Berkshire Hathaway, (5) with a total global reinsurnace premium of $19,195 billio,China Reinsurance Corporation (6) with a total total global reinsurnace premium of $16,665 billion,Lloyd's of London (7) with a total total global reinsurnace premium $16,511 billion,Canada Life Re (8) with a total total global reinsurnace premium $14,552 billion,Reinsurance Group of America Inc (9) with a total total global reinsurnace premium of $12,583 billion,Korean Reinsurance Company (10) with a total global reinsurance premium of $7,777 billion,
From Asia, there are three reinsurers which are part of top 15 global reinsurers. They are China Re, Korea Re and India's state owned GIC Re(13), with a global premium of $6,481 billion in 2020.
On the basis of only non-life reinsurance premium, GIC Re is the 10 largest global reinsurer.
An increase in total dedicated reinsurance capacity globally year over year by 7% to $ 517 billion is notable given the loss-affected operating results across the industry. Perhaps even more notable is that the increase is wholly attributable to a rise in traditional reinsurance capital, said AM Best In its latest annual look at the global reinsurance industry, “Global Reinsurance Outlook Remains Stable in a More Uncertain World.”
Although the global reinsurance industry has been able to absorb the exceptional shock from the COVID-19 pandemic, perils that are becoming more complex and interrelated highlight the need for innovation to cover unmodeled risks as they emerge, and traditional risks as they evolve, according to the special report.
A main challenge for the reinsurance industry is to remain relevant within the broader economy. After several years of struggling to meet their cost of capital, key players have started to turn the corner, said AM BEST.
However, considerable uncertainty remains over sizable COVID-19-related claims reserves, which will take years to develop. Risk in general has become more difficult to model and price, and therefore, reinsure. A higher share of uninsurable risks, considered either non-measurable, non-manageable or systemic, in a more connected world increasingly dominated by intangible assets, could translate into a smaller role for the reinsurance industry.
The global reinsurance composite produced a five-year (2016-2020) average combined ratio of 102.4% and a return-on-equity ratio of 4.3%.
The reinsurance industry also may have experienced their largest-ever first-quarter insured loss in 2021, driven predominantly by winter storms in the southern United States. However, despite the heavy losses, traditional reinsurers remain strongly capitalized. The events of the past year, dominated by the COVID-19 pandemic and the higher frequency of medium-sized catastrophe losses, exacerbated reinsurers’ focus on price.
Additionally, despite the high level of uncertainty about COVID-19-related claims reserves, AM Best views reinsurers as having been conservative in their loss estimates. The improved pricing trends, which for most business lines are offsetting growing claims uncertainty and the abundance of capital, underpin AM Best’s stable market segment outlook on the global reinsurance industry.
Other highlights from this year’s report include:AM Best has retooled the methodology behind its highly regarded annual ranking of the Top 50 Global Reinsurance Groups, to achieve greater precision in the ranking. By excluding all non-reinsurance premium, instead of including that amount if it remained below a threshold of 25% of total premium,