How Do The Major Reinsurance Companies Stack Up?

As most professionals know, reinsurance is insurance for insurance companies. “Just as individuals and businesses buy insurance to protect their assets, primary insurers, the companies that sell insurance to consumers, buy reinsurance to protect their profits and solvency,” explains the Insurance Information Institute (I.I.I.).

In the organization’s latest report, they note that reinsurance “fosters competitive insurance markets by enabling smaller insurers to compete with larger ones.”

“It strengthens US insurers by giving them access to global resources,” explained the organization in a release.

Often sold in layers, reinsurance can reach “up into the millions of dollars” to protect insurers from possible, though highly unlikely events, “such as an extraordinary number of homeowners insurance claims as a result of a hurricane or a large single event, such as the destruction of a high-value asset or a massive legal judgment.”

I.I.I. has compiled its latest findings of who the major players on the reinsurance market. Here’s what the data reveals:

 

1. National Indemnity Company (Berkshire Hathaway)

According to the 2012 numbers, Berkshire Hathaway was once again responsible for the lion’s share of reinsurance premiums written. The US-based company handled GPW (gross premiums written) of $7.242 billion in 2012, the last complete year of data available per the I.I.I. This was up significantly from the $5.616 billion in GPW from 2011.

 

2. QBE North America

QBE North America is an Australian-based reinsurer. In 2012, the company was responsible for GPW of $6.568 billion. That’s up one notch from 2011 in which the GPW clocked in at $4.192 billion, earning the company the No. 3 slot.

 

3. Swiss Reinsurance America Corporation

Switzerland’s major player on the reinsurance market slipped from 2011’s No. 2 position based on GPW of $4.327 billion. The amount was less than the previous year’s $4.391 billion. After running the show in 2008, 2009, and 2010, the slippage of two consecutive years could be cause for concern.

 

4. Munich Re America, Corp.

Munich, the German-based reinsurer, held steady in the No. 4 slot for 2012 with a slight increase in GPW to $4.07 billion from $4.051 billion the year before.

 

5. Everest Reinsurance Company

Everest was one of two Bermuda reinsurers that made the top 10, beating out newcomer Partner Reinsurance Company (No. 10) with a GPW value of $3.456 billion. Partner registered with $1.226 billion, pushing General Re Group (No. 10 in 2011) from the list.

Rounding out the list were US-based Transatlantic Reinsurance Company (GPW: $3.28 billion), Ireland’s XL Reinsurance America ($3.07 billion), Canada’s Odyssey Reinsurance Group ($2.589 billion), and Berkley Insurance Company of the US ($1.916 billion).

Here are the full details going back to 2008.

 

In Summary

While it could still be another year before data for 2013 comes in, we would expect a drop in the GPW for the coming year due to an unusually low amount of catastrophe losses. If analysts and insurers themselves are to be believed, however, that number could bounce back strong in 2014.

Until that release comes, expect Berkshire Hathaway and QBE North America to continue to be major players, while companies like Munich Re America and Everest Reinsurance pose a threat to a struggling Swiss Reinsurance America for the No. 3 position.

What do you think will happen with reinsurance numbers in the year ahead? Share your thoughts in our comments section.

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