• Tue. Nov 29th, 2022

Higher premiums lead to first quarter profitability gains – International – Insurance News

ByElla E. Kidwell

Jun 6, 2022

Profitability for reinsurers and insurers improved in the first quarter, supported by rate gains and lower catastrophe losses from a year earlier, Gallagher Re said in a global financial results report.

Corporates recorded average premium growth of 11%, driven by commercial insurance and reinsurance rates, with significant variations by line of business and region.

The average combined ratio improved to 94% from 96% a year earlier when weather-related losses included frost in Texas.

Economic inflation and greater uncertainty around the ultimate losses that will be incurred to pay claims along with the impact of sustained low interest rates on investment income are driving prices higher, the report said.

“Companies are getting rate increases in many cases for the fourth year in a row,” the report said. “Some management teams noted that they are carefully monitoring price trends and claims inflation and will adjust premium growth as necessary to support profitability.”

Some companies have built up reserves for exposures related to the war in Ukraine, although this has not been a significant factor in the overall results.

“One of the biggest challenges over the next three quarters is the continued increase in social inflation due to its impact on claims costs and loss ratio trends, particularly in the most exposed lines. liability,” says Gallagher Re.

Falling stock markets contributed to a drop in average return on equity to 9% from 14% a year earlier.

The Gallagher Re report tracks the world’s largest reinsurers and insurers that have significant business lines or reinsurance operations. This includes AIG, Travelers, Chubb, Intact, Everest Re, Hartford, CNA, Munich Re, Hannover Re, Sompo, Liberty Mutual, MS&AD, Arch, Tokio Marine, Allianz, Fairfax, Mapfre, Markel, Swiss Re, Scor, Cincinnati, Axa, Aviva and Zurich.