The first five positions in A.M. Best’s annual ranking of the Top 50 Global Reinsurance groups experienced some reshuffling in 2017, most notably in the top spot as Munich Reinsurance Company reclaimed the No. 1 position from Swiss Re Ltd. Outside of 2017, when Swiss Re Ltd. 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 Reinsurance Company and Swiss Re Ltd. comprising approximately 30% of the Top 50 tota
Berkshire Hathaway Inc. moved up two spots from last year’s ranking to No. 3, pushing Hannover Rück SE and SCOR SE to the four and five spots, respectively. The nearly $10 billion reinsurance agreement between Berkshire Hathaway’s National Indemnity Co. and American International Group Inc. 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 Rück SE and SCOR SE 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% of the total gross premium written in the Top 50 ranking.
“The amount of gross premiums written by the Top 10 in A.M. 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, senior director.
Merger and acquisition activity continues to influence the rankings, including the most dramatic change in the 2018 ranking, as Sompo Holdings, Inc. jumped from No. 22 from No. 46. Year-end 2017 was the first year that Endurance Specialty Holdings Ltd. (now Sompo International Holdings Inc.) was consolidated into Sompo’s financial reporting, leading to an estimated 265% 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%, mainly due to catastrophe losses. The Top 5 average combined ratio was slightly higher at 109.7%, which echoes the segment’s results and reinforces the syndicated nature of the sector.
Other highlights from this year’s report include:
QBE Insurance Group Limited and W.R. Berkley Corporation experienced the most notable downward movements, by 14 and 7 positions, respectively;
Two sub-rankings of top non-life and life global reinsurers, which highlights reinsurance groups that hold a true global footprint or business profile; and