U.S. reinsurers post gains on underwriting success

U.S. reinsurer results for the first quarter of 2004 show underwriting diligence is paying off with the members of the Reinsurance Association of America (RAA) posting a combined ratio of 94.0%. This compares with 96.4% in the first quarter of 2003.Premiums were actually lower in the first quarter of this year, with gross written premiums of US$11.7 billion (Q1 2003: US$12.6 billion), and net earned premiums of US$6.9 billion (Q1 2003: US$7.5 billion).But the industry’s loss ratio dropped over the period to 67.6% from 71.3% a year ago, partially offset by a 1.3% increase in the expense ratio. The industry’s investment gain in the firs quarter of 2004 was a whopping US$188 million, up substantially from the US$8.9 million underwriting profit posted in the first quarter last year. While investment income was down slightly to US$1.1 billion (Q1 2003: US$1.2 billion), the industry posted net income of US$1.4 billion for the most recent quarter, up from US$1.3 billion the year prior. Policyholder’s surplus also grew over the same period 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). And posting a strong turnaround was Partner Re, which took a loss of US$16 million last year, but posted net income of US$7.3 million for the most recent quarter.