RAA members’ policyholders’ surplus slips $45.9bn to $246.3bn in Q2

The Reinsurance Association of America (RAA)’s membership saw its collective policyholders’ surplus fall by $45.9bn quarter to quarter to $246.3bn as of 30 June 2022, while the group’s net premiums written (NPW) increased by 13.4 percent during the first six months of this year to $42.1bn.

As data in the RAA’s latest quarterly results survey show, the 17-strong group of reinsurers who operate in the US saw their collective policyholders’ surplus as of 30 June 2022 decrease by 15.7 percent compared with Q1’s close of $292.2bn to $246.3bn.

Much of the quarter to quarter decline in policyholders’ surplus was recorded by National Indemnity. The Berkshire Hathaway subsidiary’s shareholders’ surplus fell from $242.6bn as of 31 March 2022 to $201.7bn come the end of Q2 2022 (as this publication reported in August, Berkshire Hathaway suffered a $53bn investment loss in Q2).

That $246.3bn represented a 4.1 percent decrease compared with the RAA’s collective policyholders’ surplus at the prior-year point.

The NPW increase was more than matched by the growth in the RAA group’s gross premiums written which soared by 34.7 percent year on year to $63.4bn for H1 2022.

RAA’s aggregate combined ratio improved 70 basis points year on year to 96.1 percent during the first half of 2022.

The improvement in the group’s average combined ratio came as a 1.1 point increase in the collective’s loss ratio to 73.5 percent was more than offset by a 1.8 point decrease in its expense ratio to 22.6 percent.

Six of the RAA’s members saw their H1 2022 combined ratios increase year on year.

American Agricultural’s combined ratio increased 12.1 points year on year to 102.2 percent for H1 2022, while EMC Reinsurance’s surged by 27 points to 125.8 percent.

Elsewhere, National Indemnity’s combined ratio for the first half of 2022 increased 5.9 points year on year to 100.1 percent, and Scor US’s went up by 3.8 points to 106.8 percent for H1 2022.

Toa Re’s combined ratio increased 14.6 points year on year to 123.5 percent, while XL Re’s went up by 6.2 points to 96.6 percent for 2022’s first half.

The RAA’s other 11 members saw their H1 2022 combined ratios improve year on year, with GenRe seeing a 16.5 point drop to 76.2 percent, while PartnerRe’s improved 11.1 points to 84.1 percent.

RenaissanceRe’s combined ratio for H1 2022 was down 9.6 points over the prior year period to 93.7 percent, and SiriusPoint America’s decreased 9.5 points to 100.1 percent.