Global reinsurance market: 2023 renewal special

In addition, the return on equity hardly averages 4.4% over the last five years. This low return puts particular pressure on the capital and shareholder remuneration policy.

To counteract the current volatility of the financial markets, it is imperative that reinsurance companies return to positive and stable operating results.

Following recurring operating losses, several of them, including SCOR, have come under particular scrutiny by the rating agencies. The latter are forcing them to adopt strict underwriting and pricing discipline, which is synonymous with better results.

Global reinsurance market: European reinsurers’ results

Over the past five years, the four major European companies and by the same token global reinsurers namely: Munich Re, Swiss Re, Hannover Re and SCOR, have exhibited a poor performance compared to the global average. Their premium growth rate over five years (6.5%) is nearly 2 points lower than that reported by all reinsurers (8.4%).

Another disadvantage is that their non-life loss ratio is higher than that of other companies, with a loss ratio of 71.3% against 69.9% for the rest of the market. However, the non-life combined ratio, the main indicator of technical performance, is identical for both groups, namely 102.6%.

The performance of the world's leading reinsurers is, on the other hand, better than that of other reinsurers in terms of return on investment (ROE). Their ROE is on average 5.2% for the last five years against 4.4% for the whole profession.

Another point in favor of the leaders, their management expense ratio (31.3%) is lower than that of other reinsurers (32.7%).

Global reinsurance market: Lloyd’s results

Between 2017 and 2021, Lloyd's had underperformed, with an average combined ratio (104.9%) over the period being more than two points higher than that achieved by the market as a whole (102.6%) and its return on equity (0.3%) being set at almost zero.

From a technical point of view, the Lloyd's market has a high level of management expenses, that is, 38% compared to 31.3% for the four world leaders and 32.7% for the whole market.

Global reinsurance market: reinsurers in the Asia-Pacific region

During the reporting period, Asia-Pacific reinsurers outperformed their colleagues in other regions, with a combined ratio slightly exceeding 100% and a return on equity close to 6%.

Reinsurers in the region have stable market shares and are striving to grow their business, either through natural growth or by means of acquisition.