Best’s Special Report: Swiss Re Ltd. Takes Over Top Spot in A.M. Best’s Top 50 Ranking of Global Reinsurers

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OLDWICK - SEPTEMBER 07, 2017 08:38 AM (EDT)
The top 10 positions within A.M. Best’s annual ranking of the Top 50 Global Reinsurance groups experienced some reshuffling in 2016, most notably in the top spot, as Swiss Re Ltd. jumped over Munich Reinsurance Company. The change in the No. 1 position was the first for any of the top three spots since 2010, with Hannover Rück S.E. continuing to rank No. 3, according to A.M. Best’s annual special report on the global reinsurance industry. Falling out of the top 10 was PartnerRe Ltd. and Everest Re Group Ltd., as detailed in the new Best’s Special Report, “Down But Not Out: Reinsurers Look to Reposition Amid Market Disruption.” The 2017 ranking is based on reinsurance gross premiums written, with the top 10 comprising approximately 70% of the top 50 total.

The report makes notes of A.M. Best’s nuanced formulation of the Top 50 global reinsurance group: If a company or group’s gross premiums written for reinsurance is 75% or more of its entire gross premium volume, all gross premiums written are counted in the ranking as reinsurance premiums. Conversely, if a company’s or group’s reinsurance/insurance split consists of less than 75% reinsurance premiums, then just the reinsurance premiums are counted and the insurance premiums are excluded. As Munich Reinsurance Company’s significant primary operations account for just more than 30% of its total gross premiums written, its insurance premiums have been excluded, in line with A.M. Best’s approach. Swiss Re Ltd.’s reinsurance/primary insurance split is more modest, with approximately 15% of gross premiums written coming from insurance operations, putting it under the threshold to split out its insurance and reinsurance premiums.

“Ultimately, the takeaway should be that Swiss Re and Munich Re are the reinsurance market’s undisputed largest and most influential players. Both have roughly double the premium volume of their closest competitors, offer similar capacity across nearly all reinsurance products and geographies and have been the market leaders for well over a decade,” said A.M. Best Senior Director Robert DeRose. “One is the immovable object, and the other is the unstoppable force; we will leave it to market participants and observers to decide which is which.”

Everest Re Group Ltd’s ranking drop to 14 from nine also was impacted by A.M. Best’s approach, as its primary insurance premiums increased above the 25% threshold. Moving up to the top 10 were Great West Lifeco and Korean Reinsurance Company, at No. 9 and No. 10 respectively. Most other changes in the ranking were due to ongoing merger and acquisition activity in the sector.

The top 50 reinsurance groups recorded an average combined ratio of 93.1% in 2016, which mirrored the average combined ratio of the top five reinsurers in the ranking, reflecting the underwriting discipline employed by the industry.

Other highlights from this year’s report include:

• In an effort to spotlight reinsurance groups that hold a true global footprint or business profile, this year’s report for the first time breaks out two sub-rankings of top non-life and life global reinsurers.


• Although the growth in convergence capacity has slowed from previous years, it still grew by approximately 10%. A.M. Best estimates that alternative capital represents approximately USD 80 billion of capacity, with the vast majority of capital (USD 345 billion) from traditional sources.


• The global reinsurance report also includes a discussion among A.M. Best analysts and insurance-linked securities professionals on the state of insurance-linked securities, along with in-depth reviews of the Lloyd’s and life reinsurance markets, as well as geographic regions such as Brazil, Asia/Pacific and Africa.

To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=265357 .

A video interview with A.M. Best Senior Financial Analyst Scott Mangan on the top 50 reinsurance group ranking is available.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.