CATASTROPHE-RIDDEN 2017 COULD DRIVE GLOBAL RE SECTOR’S PROFITABILITY LEVEL TO SIX YEAR LOW

A catastrophe-ridden 2017 could drive the overall profitability level for A.M Best’s composite of global reinsurers according to a new Best’s Briefing.

The Best’s Briefing titled ‘Global Reinsurance: Where have All the Losses Gone?’ projects an estimated combined ratio of 110% for this sector, with return on equity (ROE) ranging from 0% down to -5%.

This compares with a five-year average combined ratio of 91% and a five-year average ROE of 11%.

The last time the global reinsurance composite reported a combined ratio above 100% was in 2011, due to services of global catastrophes, which included earthquakes in Japan and New Zealand, and widespread flooding in Thailand.

Company reserving estimates associated with hurricanes Harvey, Irma and Maria along with the Central Mexico earthquake indicate that accumulated insured losses could reach $90 billion, well below other published modelled loss figures.

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