Thursday 14 September 2023

BEST'S MARKET SEGMENT REPORT: OPERATING PERFORMANCE, RETRO COST DRIVE ASIAN REINSURER STRATEGIES

HONG KONG, Sept 11 (Bernama-BUSINESS WIRE) -- Despite a sharp increase in catastrophe losses outside their home markets and a challenging investment environment, major Asia-Pacific reinsurance companies still managed to deliver strong year-over-year net premium growth of 8.1% in 2022, according to a new AM Best report.

The Best’s Market Segment Report, “Operating Performance, Retro Cost Drive Asian Reinsurer Strategies”, is part of AM Best’s look at the global reinsurance industry in concert with the Rendez-Vous de Septembre in Monte Carlo. Additional reports, including AM Best’s annual ranking of the Top 50 global reinsurance groups and in-depth looks at the insurance-linked securities, Lloyd’s, life/annuity, health and regional reinsurance markets, are available at Best’s Research.

According to this report, which is based on the operating performance of a group of selected Asia-Pacific-domiciled reinsurers that rank among the top 50 largest reinsurance groups globally, reinsurers sustained the ability to deliver stable operating and combined ratios in 2022. The composite’s net income fell to USD 166 million in 2022 from USD 688 million in 2021, while return on equity also declined significantly, to 1.8% in 2022 from 7.0%. However, the combined ratio of reinsurers in the Asia-Pacific composite improved slightly to 100.8 in 2022 from 101.1 in the previous year, lower than the five-year average of 101.0.

“With a higher cost of capital and a challenging investment environment in 2022, Asia-Pacific reinsurers maintained their underwriting discipline in 2023 renewal to ensure a reasonable profit margin and adjust pricing in proportional treaties to improve performance,” said Christie Lee, senior director, head of analytics, AM Best. “Primary insurers also followed this rule, aligning with reinsurance pricing, terms and conditions, which is expected to lead to better revenue and underwriting results for reinsurers.” 

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