Even as India’s state owned reinsurer GIC Re has retained its 11th ranking, Swiss Re, the second largest global reinsurer has toppled Munich Re from its position as the world’s largest reinsurer in 2018, said AM Best.
AM Best has taken gross premiums written (GPW) in 2018 for preparing its list of top 50 global reinsurers.
Another global ranking among the top 40 global reinsurers will soon be unveiled by another international rating agecy-Standard & Poor's(S&P). However, S&P takes the net premium while preparing its global rankings of the international reinsurers.
For GIC Re, the reinsurer’s total premium of over Rs 44,000 crore during 2018-19 has been factored in while finding its global ranking by the AM Best.GIC Re in the S&P's 2017 ranking list was the 10th largest global reinsurer.
Supported by growth in its life business across most markets, Swiss Re’s total GPW increased by 4.7 per cent, from $34.775 billion in 2017 to $36.406 billion in 2018, said the rating agency that has released its list of Top 50 Global Reinsurance Groups directory.
Munich Re had remained at the top since 2010, with the exceptions of 2016 and, now, 2018.
Munich Re’s total GPW declined by 5.3 per cent, a drop that AM Best attributes to the termination of two large transactions, with measured growth in the remaining life business across all markets.
There are two Asian reinsurers- China Re (7th) and Korea Re(10th ) in the list of top 10 global reinsurers as prepared by the AM Best.
Another notable shift in the rankings comes in the form of Warren Buffett’s global re/insurance company Berkshire Hathaway dropping two places to fifth, with Hannover Rück climbing to number three and SCOR to four.
Despite the switch, AM Best states that both Swiss Re and Munich Re will likely continue competing for first place for the foreseeable future, as together they account for close to 30% of total GPW in the rankings.
The market share of the top 10 reinsurers has consistently been around 70 per cent over the past several years.Overall, the top ten players account for 68%, or $179 billion, of GPW in the Top 50 ranking.
AM Best notes that Berkshire Hathaway’s two-place rise last year was primarily due mainly to a reinsurance agreement of almost $10 billion between National Indemnity Company (NICO) and AIG, which covers AIG’s previously underwritten commercial insurance policies.
Given the one-off nature of the deal, NICO’s GPW decreased by more than 30% in 2018, with the company falling back to fifth place.
Although Hannover Rück and SCOR both reported modest growth in 2018, AM Best says the latter experienced a mild top-line decline in this year’s Top 50 ranking, driven by the weakening of the euro against the US dollar.
The most significant drop in ranking was by Maiden Re, falling out of the top 50 from its 40th spot in 2017.
AM Best says the drop was driven by its a decision to divest all of its US treaty reinsurance operations, which no longer factor into its premium revenue.