In 2011, only 4.18% out of the 4 597 billion USD of direct premiums were reinsured: 8% for non-life insurance and 2.2% for life.
As far as direct insurance is concerned, the non-life business accounts for only 43% of the overall premiums volume whereas in reinsurance, this same class accounts for 77% of the premiums volume, that is, 169.4 billion USD.
in billions USD1990 | 2008 | 2009 | 2010 | 2011 | |
---|---|---|---|---|---|
Reinsurance premiums volume | 84 | 180 | 190 | 200 | 220 |
% of non life premiums | - | 65% | 70% | 72% | 77% |
% of life premiums | - | 35% | 30% | 28% | 23% |
The structure of the reinsurance market
Reinsurance supply
It is the European reinsurers who monopolize the reinsurance supply worldwide with a market share attaining 59%. Europe, with its three main reinsurance places: Ireland, United Kingdom and Continental Europe, maintains its leadership since 1998, date when it already accounted for 59% of the supply.
However, the role of Continental Europe has slightly decreased from 49% of the market share in 1998 to 47% in 2011. This slight decrease has been offset by the performance of Irish reinsurers whose supply has risen from 2% to 4% during the same period.
Across the Atlantic, the participation of American reinsurers has also dwindled from 26% in 1998 to 21% in 2011. The Bermudans have, however, seen their percentage double from 4% to 8%. A slight growth has been noticed for Asian reinsurers who progress from 8% to 10% between 1998 and 2011.
Geographic breakdown of reinsurance premiums: 2008-2011
2008 | 2009 | 2010 | 2011 | |
---|---|---|---|---|
Gross ceded premiums | ||||
North America | 51% | 42% | 47% | 47% |
Europe | 37% | 37% | 38% | 38% |
Asia | 8% | 10% | 9% | 9% |
Rest of the world | 4% | 11% | 6% | 6% |
Gross accepted premiums | ||||
North America | 44% | 45% | 60% | 60% |
Europe | 55% | 54% | 39% | 39% |
Asia | 1% | 1% | 1% | 1% |
Rest of the world | 0% | 0% | 0% | 0% |
Reinsurance demand
Almost half the global reinsurance demand comes from the United States. This country which remains, the number one risk-exporting market, uses up, alone, 47% of the capacities. It is followed by Europe with 38% of the premiums ceded, Asia with 9% and the rest of the world with 6%.
Reinsurance remains in the hands of Europe and North America. Both markets are the main players of reinsurance with 99% of the accepted premiums while the other regions of the world play a marginal role.
It is worth reminding as well that Europe and the United States use up 85% of the ceded premiums worldwide.
Concentration of the reinsurance market
Reinsurance market remains quite concentrated, accounting a hundred professional players operating worldwide. Only a handful of them dominate the business.
In 2011, the first five reinsurers controlled 44% of the market shares, compared to 17% in 1980, while the first ten totaled 58% of the premiums in 2011 against 22% in 1980.
We note, however, the appearance of small actors in the emerging markets such as: Bermudas, Brazil, India, South Korea, etc. Reinsurers in these countries are attempting to set foot on international markets while consolidating their position locally.
Rating evolution of the 25 most important reinsurers
August 2001 | August 2006 | June 2012 | |
---|---|---|---|
AAA | 5 | 2 | 0 |
AA+ | 4 | - | 2 |
AA | 6 | 1 | 1 |
AA- | 5 | 9 | 5 |
A+ | 2 | 3 | 9 |
A | 1 | 3 | 4 |
A- | 1 | 3 | 3 |
BBB+ | - | 2 | - |
BBB | - | - | - |
BBB- | 1 | 1 | - |
BB+ | - | - | - |
BB | - | - | - |
BB- | - | - | - |
B+ | - | - | - |
Not rated | - | 1 | 1 |
25 | 25 | 25 |
Evolution of the reinsurers’ market shares
1980 | 1990 | 2000 | 2009 | 2010 | 2011 | |
---|---|---|---|---|---|---|
The first 5 reinsurers | 17% | 23% | 41% | 47% | 43% | 44% |
From 6th to 10th reinsurer | 5% | 9% | 14% | 11% | 11% | 14% |
Rest of the market | 78% | 68% | 45% | 42% | 46% | 42% |
Total of the market | 100% | 100% | 100% | 100% | 100% | 100% |
Ranking 2011 of the first ten reinsurers per premiums
in millions USDGross written premiums | Gross written premiums | Combined ratio | |
---|---|---|---|
Munich Re | 33 719 | 32 274 | 114,2% |
Swiss Re | 28 664 | 22 868 | 101,6% |
Hannover Re | 15 664 | 13 921 | 104,5% |
Berkshire Hathaway | 15 000 | 15 000 | 99,9% |
Lloyd’s | 13 621 | 10 015 | 130,6% |
Scor | 9 845 | 8 891 | 104,5% |
Reinsurance Group of America | 7 704 | 7 736 | - |
China Re | 6 179 | 5 904 | 100,1% |
Partner Re | 4 621 | 4 474 | 125,4% |
Korean Re | 4 551 | 3 043 | 102,8% |