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National Indemnity Co. drove a 78.4% increase in net written premiums among 18 U.S. reinsurers in 2014.
The Berkshire Hathaway Inc. unit's one-time affiliated loss portfolio transfer from Geico Auto Insurance operations and subsequent quota share agreement was a major factor in boosting its net premiums written by $20 billion to lead reinsurers tracked by the Reinsurance Association of America to $47.75 billion in net premiums written last year.
Despite ongoing “competitive pressure on reinsurers,” the results represented “another really good year” for U.S. reinsurers, said Jim Auden, Chicago-based managing director of insurance at Fitch Ratings Inc.
Underwriting results were also “pretty good in total” with few examples of underwriting losses among the reinsurers surveyed, said Mr. Auden.
Among the top 10 reinsurers, only QBE North America posted a 2014 combined ratio over 100% and the smallest profit of the group. QBE is still recovering from 2013's $580 million loss due to higher than expected claims.
“The results, as you would expect, were strong,” said Taoufik Gharib, New York-based director of financial services ratings for North American insurance at Standard & Poor's Ratings Services.
“Overall, the reinsurance industry ... performed well in 2014,” due mainly to a benign catastrophe year and ongoing reserve releases, Mr. Gharib said.
While still profitable, seven of the top 10 reinsurers reported a smaller profit in 2014 than 2013.
Results for U.S reinsurers compared favorably with the global reinsurance sector, Mr. Auden said.
National Indemnity's loss portfolio and quota share agreements with affiliated Geico companies, all effective Jan. 1, 2014, did have an outsized effect on the overall figures, Mr. Auden said.
Munich Re America Corp. was a distant No. 2 with $3.25 billion in net premiums written last year.
The 18 U.S. reinsurers' 2014 combined ratio deteriorated to 91.1% from 86.8% a year earlier, with a 69.6% loss ratio and an expense ratio of 21.5%, according to the RAA.
Policyholders' surplus increased 2.2% to $141.8 billion for the year.
Stable is the best way to describe commercial property/casualty insurers' performance during 2014.