Global (re)insurers’ performance for 9M 2022 – report

Despite increased loss activity in the third quarter, global (re)insurers’ combined ratios remained strong in the first nine months of 2022, according to a new report from Gallagher Re.

While loss activity increased in the third quarter, underwriting performance remained strong through the first nine months of the year with an average combined ratio of 96.9%, the report found. This was supported by double-digit premium growth, lower natural catastrophe loss activity and a reduced expense ratio.

Year-on-year premium growth averaged 13% at 9M 2022, driven by improved pricing for commercial lines and reinsurance business, Gallagher Re said.

However, realized and unrealized losses on equity/alternative investment assets drove a lagging return on investment 0f 7.5% in 9M 2022, compared to 12.4% in 9M 2021. Shareholders’ equity fell by 28% during 9M 2022, spurred largely by a rise in interest rates, which drove down market values of bonds and equities held by global reinsurers.

“The most impacted companies are those with long-duration bond portfolios and high allocation to equities,” the report said. “Capital return through dividends and buybacks also contributed, albeit less significantly, to lowering shareholders’ equity.”

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