Global reinsurance capacity rises to £477bn

Figures from Willis Re’s 13th Reinsurance Market Report, which tracks the capital and profitability of the global reinsurance industry, show the total capital dedicated to the global reinsurance industry was £477bn at the end of 2020, an increase of 7% on the previous year.

James Kent, global CEO of Willis Re, said: “Such a solid development of the global reinsurance industry’s capital base would hardly have been expected earlier last year, as the COVID-19 pandemic was gathering pace.

“Willis Re’s analysis provides clear evidence of the strength and resilience of reinsurance market capacity. Reinsurers and insurers alike must contend with the challenges of low interest rates. But, looking through the turbulence of COVID-19 and nat cat claims, and a declining reliance on reserve releases, there is a clear improving trend in underwriting profitability.”

The report also assesses a subset of companies which provide the majority of the industry’s capital. The report found that while COVID-19 had hit underwriting performance, the underlying movement was positive.

It said: “The subset’s reported combined ratio deteriorated from 100.6% in 2019 to 104.1% in 2020, due entirely to COVID-19 loss reserving. However, on an underlying basis i.e. normalising COVID-19 and natural catastrophe losses and excluding reserve releases, the combined ratio improved from 103.1% to 100.7%. This is the first full-year improvement in this ratio since at least 2014.”

    Share Story:

Recent Stories