Improved reinsurance underwriting results helped global nonlife reinsurers’ financial results in 2013, but the sector outlook remains negative on deteriorating fundamentals, Fitch Ratings Inc. said Tuesday.
The group of 24 nonlife reinsurers followed by Chicago-based Fitch in its “Global Reinsurance Results Dashboard” report had “solid underwriting profits” as a result of “manageable catastrophe-related losses and sustained favorable loss reserve development,” Fitch said in its report.
However, Fitch noted “muted growth in capital and premiums” as shareholders’ equity growth reached only 1.6% for the group in 2013. The group netted only “marginal growth in overall insurance premiums as underwriting opportunities are limited,” the report said.
Swiss Re Ltd. had the largest 2013 percent increase in net premiums written at 30.2% over 2012, while Munich Reinsurance Co. remained the largest reinsurer with 2013 net written premiums of $35.50 billion, the report said.
Fitch said its global reinsurance sector outlook is negative, “as fundamentals have deteriorated with declining premium pricing and weakening of terms and conditions across most lines.” Market conditions, said Fitch, are not likely to improve “in the near term.”
The ratings outlook is stable, said Fitch, “as the majority of ratings will be supported by strong capitalization and continued, if declining, profitability, with negative fundamental trends largely factored into current ratings.”