Aggregate net income for reinsurers jumps in first half of 2018: Willis

Aggregate net income for the 34 reinsurers in the Willis Index jumped to $14.5 billion in the first half of 2018 compared with $8.3 billion in the same period last year, a 74.7% increase, according to a report Thursday from Willis Towers Watson PLC.

The increase was largely due to a reduction in natural catastrophe losses, the report said.

Aggregate reported net written premiums for the group rose 5.8% to $149.7 billion compared with $141.5 billion in the year-ago period, the report said.

Shareholders’ equity among the companies fell 1.6% to $364.9 billion compared with $371 billion in the year-ago period, the report said.

The combined ratio for the group improved to 94.3% from 95.0% in the year-ago period, the report said.

Even so, challenges remain, the report said.

“Underwriting profitability continued to be pressured by rising expense ratios. Reinsurers faced continued upward pressure on expense bases from a range of sources which included regulatory compliance, strategic investment in underwriting platforms, IT and digitization,” the Willis Towers Watson report said.

Investment yields among the group were “broadly unchanged” at 2.9% compared with 2.8% in the year-ago period.

Alternative capital in the reinsurance sector increased to $88 billion during the first half of 2018 compared with $75 billion in the year-ago period, according to Willis Towers Watson Securities.