U.S. Reinsurers’ 1-Q Shows Underwriting Windfall

U.S. reinsurers produced a combined ratio of 94.0% for the first quarter of this year compared with the 96.4% ratio posted for the same period in 2003, according to data collected by the Reinsurance Association of America (RAA). The improved performance was achieved through stronger underwriting, which saw the sector’s loss ratio fall to 67.6% for the latest reporting period versus the 71.3% ratio shown a year ago.

Premium volume within the reinsurance sector came in marginally lower for the first quarter of this year, with gross written premiums of US$11.7 billion (2003 1-Q: US$12.6 billion) and net earned premiums of US$6.9 billion (2003 1-Q: US$7.5 billion).

Companies primarily benefited from underwriting for the first quarter of 2004 which produced a profit of US$188 million – significantly greater than the US$8.9 million underwriting profit disclosed for the first quarter of last year. Reinsurers’ investment income for the latest reporting period came in slightly lower year-on-year at US$1.1 billion (2003 1-Q: US$1.2 billion), which saw the sector’s net income clock in at US$1.4 billion compared with the US$1.3 billion made a year ago.

Policyholder’s surplus grew over the latest quarter to US$56.2 billion from US$42.2 billion. Topping the pack for profits are National Indemnity (US$457 million), American Re (US$271 million) and GenRe (US$270 million). At the other end of the spectrum, posting the highest losses are Endurance Re (-US$9.9 million), Axis Re (-US$9.2 million) and Trenwick America (-US$4.9 million).