Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • September 2019
09

Global reinsurance capital rises 8%

Open-access content Monday 9th September 2019 — updated 5.50pm, Wednesday 29th April 2020

Total capital dedicated to the global reinsurance industry has risen by 8% since the end of last year thanks to strong investment markets, data from Willis Re has revealed.

2


The figures show that capital in the reinsurance industry had reached $559bn (£452bn) at the halfway point of this year, compared with $518bn measured at the end of 2018.

The largest component of this was the capital from 36 reinsurance companies tracked by Willis Re, which was up 11% to $440bn amid falling bond yields and rising equity markets.

The recent strong investment appreciation was a reversal of the losses recorded last year.

"This improvement is supported by the positive trajectory seen in 2019 market pricing across many lines," said Willis Re's global CEO, James Kent.

"Looking behind the headline figures reveals a positive direction of travel for reinsurers, with modest but important reductions in non-catastrophe combined and expense ratios."

Willis Re also conducted an in-depth analysis on a subset of reinsurers that made disclosures of natural catastrophe (nat cat) losses and prior year reserve releases.

The return on equity (RoE) for this subset has jumped to 13.9%, compared with 8.5% at the halfway point of 2018. The RoE was 7.3% when excluding investment gains.

Normalising for nat cat losses and removing the benefit from reserve releases resulted in an underlying RoE of 10.8%, or 4.2% excluding investment gains.

The subset's combined ratio deteriorated from 93.3% at the halfway point of 2018 to 94.9% on a reported basis thanks to a lower pace of reserve releases and higher nat cat activity.

Stripping out prior-year development and replacing actual nat cats with a normalised level, Willis Re put the underlying combined ratio at 100.5%, up from 101.5% at the midway point of last year.

Despite the increase in global reinsurance capital, Kent said that reinsurers should be wary of underlying patterns.

"The slowdown in reserve releases continues, so in the months and years ahead, reinsurers will need to further realise these trends," he added.


Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession

This article appeared in our September 2019 issue of The Actuary .
Click here to view this issue

You may also be interested in...

2

Climate change ranked the top extreme risk for investors

Global temperature change is the number one extreme risk to economic growth and asset returns for investors, a new ranking by the Thinking Ahead Institute has suggested.
Monday 9th September 2019
Open-access content
2

Widespread pension confusion among UK public uncovered

The majority of UK workers think pensions are confusing and don’t know how much to save, according to a new study, with much of the blame levelled at employers.
Tuesday 10th September 2019
Open-access content
2

Over-60s lose almost £2bn through pension opt-outs

British adults aged 60 and over could be missing out on nearly £2bn in retirement savings by opting out of workplace pensions early, a new study has found.
Wednesday 11th September 2019
Open-access content
shutterstock

Record InsurTech investment forecast

Insurance technology firms attracted $3bn (£2.4bn) of investment in the first half of 2019 worldwide, and are forecast to receive a record $6bn by the end of the year.
Wednesday 11th September 2019
Open-access content
2

Driverless vehicles could see most motor insurance premiums disappear

The adoption of driverless vehicles could see up to three in five motor insurance premiums vanish worldwide, a study by global law firm Kennedys has suggested.
Wednesday 4th September 2019
Open-access content
Insurers urged to offer on-demand policies as InsurTech funding soars

Insurers urged to offer on-demand policies as InsurTech funding soars

Insurance firms can no longer rely on their brand names to retain customers and should offer instant, flexible and digital quotes, a leading data analytics company has said.
Tuesday 3rd September 2019
Open-access content
Filed in
09
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Reserving Analyst

London (City of)
Negotiable
Reference
149485

Senior GI Modeler - Capital and Planning

London (Central)
£ excellent
Reference
149436

Risk Oversight Manager

Flexible / hybrid with a minimum of 2 days per week office-based
£ excellent
Reference
149435
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ