Performance among the 17 non-life reinsurers monitored by Fitch Ratings Inc. improved during the first half of 2021 as the group’s combined ratio dropped to 94.5% from 105.9% during the first half of 2020 and net premiums written jumped 18.47% to $72.78 billion, Fitch said in a report Monday.
Last year’s first-half combined ratio included $6.1 billion of COVID-19 pandemic-related reinsurance losses, Fitch said, compared with only $500 million in non-life pandemic reinsurance losses in the first half.
Only two of the companies, Markel Corp. and RenaissanceRe Holdings Ltd., reported a higher reinsurance combined ratio than in the prior year.
Insured natural catastrophe losses were a “manageable” $40 billion in first-half 2021, more than both the $35 billion of insured catastrophe losses in first-half 2020 and the $33 billion 10-year average from 2011-2020 of first-half insured losses.
Meanwhile, reinsurance premium rate increases continue, although “market pricing at the various 2021 reinsurance renewals was lower than reinsurers expected as rate momentum slowed,” Fitch said. Nonetheless, reinsurers have continued to secure premium rate increases since mid-2019.
U.S. property loss hit accounts were up 10% to 25% at June 1 and July 1 2021 renewals compared with 10% to 30% in the same period in 2020; U.S. property loss free accounts were flat to up 15% in 2021 against up 5% to 20% a year ago.
Florida property loss hit was up 5% to 30% at June 1 and July 1, 2021, renewals against up 5% to 35% a year ago. Florida property loss free was down 5% to up 5% at June 1 and July 1, 2021, renewals compared with up 5% to up 39% a year ago.
U.S. general liability with no loss emergence were flat to up 10% at June 1 and July 1, 2021, renewals compared with flat to up 20% a year ago.
Prices are expected to continue rising into 2022 and beyond “as reinsurers exercise discipline and pricing remains inadequate in the face of heightened catastrophes, low interest rates and inflation concerns,” Fitch said.