Swiss Re holds on to top spot in 50 biggest reinsurer rankings
Swiss Re has maintained its pole position for the second year running at the top of AM Best’s list of the world’s largest reinsurers.
The battle for the 2019 top spot – based on both life and non-life gross premium written – has been hotly contested between Swiss Re and rival Munich Re over the past decade, with the German reinsurance giant having led the ranking every year since 2010 until Swiss Re topped the 2016 list.
While Munich Re stole back the title in 2017, since then Swiss Re has held onto the top position.
In 2019, Swiss Re wrote $42.23bn in gross written premium across life and non-life business, an increase of nearly 16 percent year-on-year.
AM Best said this growth was due to a 25.1 percent increase in non-life business, driven by large transactions in the Americas and EMEA, as well as growth in the group’s natural catastrophe business and rate activity in underperforming lines.
Comparatively, Munich Re reported a more modest 5.7 percent increase in total reinsurance GWP, which AM Best said was dampened by depreciation in the euro of 2.2 percent against the US dollar.
Munich Re reports its figures in euros while Swiss Re reports in US dollars.
AM Best noted that currency exchange rate fluctuations have, and will continue to have a meaningful effect on its rankings.
The rating agency added that Munich Re has sizable primary insurance operations, which account for approximately 32 percent of its total GWP, leading to an exclusion from AM Best’s GWP calculation.
Swiss Re’s primary insurance business remains below the 25 percent threshold for separating the primary and reinsurance premium, AM Best said.
Together Swiss Re and Munich Re account for 27.8 percent of the top 50’s total GWP in 2019, with AM Best stating further demonstrates the dominance of large reinsurers at the top of the list.
AM Best said it expects Swiss Re and Munich Re to continue to occupy the top two spots on the list.
Top ten
On the whole, AM Best’s rankings remained largely unchanged year-on-year, with nearly all reinsurers in the top ten holding on to the same position they held in 2018.
However, Partner Re proved to be an outlier, moving up the league table by two places to enter the top ten.
PartnerRe ovetook Korean Re and GIC after booking an uptick in gross written premium of 15.6 percent year-on-year.
This marks Partner Re’s return to the top 10 after falling just short in the prior three years. The group’s growth in 2019 was driven by favorable rate activity on renewals and successful new business production, AM Best said.
Despite the consistency in the top ten – with nine out of ten of largest reinsurers holding onto their rankings from 2018 to 2019 – most carriers grew their book significantly.
Hannover Re reported top line growth of 15.8 percent; China Re, 13.8 percent; and Great West, 31.2 percent.
AM best said Hannover Re’s growth is highlighted by 20.8 percent organic growth in non-life business, specifically traditional business and structured reinsurance.
Elsewhere, China Re and Great West were both aided by large transactions in 2019.
AM Best said China Re benefitted from the addition of premium from its acquisition of Chaucer towards the end of 2018.
Great West capitalized on two large longevity deals in 2019, which resulted in the third-largest premium increase and the largest increase among the life reinsurers.
The top ten reported overall GWP growth of 10.6 percent, which AM Best said is in line with the overall sentiment that markets are hardening.
The top ten accounted for 68.6 percent of GWP.
“In recent years, this percentage has consistently been around 70 percent, reinforcing that the largest reinsurers house disproportionately sizable amounts of risk, despite cedants’ efforts to diversify their reinsurance panels and spread out their counterparty risk,” the report said.
“The static nature of this weighting reflects the largest companies’ strong long-term relationships with brokers and cedants,” it added.
Biggest movers
The accolade of biggest mover up the table in 2019 is jointly held by Bermudian carrier Validus and WR Berkely (see table).
Both leapfrogged five places, with Validus climbing to 28 and WR Berkley to 45.
AM Best noted that Validus grew its GWP by 39.1 percent in 2019 and was able to effectively expand its non-property lines, as well as grow its business relationship with AlphaCat to improve production totals.
This is the highest Validus has been ranked since it entered the league table at 24 in 2009.
Fellow Bermudian Renaissance Re generated the largest relative premium growth, up a substantial 45.2 percent in GWP and 58.6 percent in net premiums written.
The increases were driven mainly by RenRe’s acquisition of Tokio Millennium Re.
Despite the substantial growth, Ren Re only advanced one spot to 16.
Of the fallers, Qatar Re led the charge, dropping 17 places to 43 in the rankings.
AM Best said its fall was “due to corrections in the reporting of intercompany reinsurance in the data”.
Tokio Marine came in behind the Doha-headquartered carrier, falling six places to 36 in the table.
AM Best attributed the Japanese ‘big three’ carrier’s fall to its sale of Tokio Millennium.
It added Tokio Marine may continue to decline through 2020, as the transaction with Ren Re was finalized in mid-2019.
Lloyd’s maintained its place at sixth place for a fourth year in a row.