Decreasing 2017 profits for the top 5 global reinsurers

4 April 2018 — Marina MAGNAVAL
Top 5 global reinsurers saw a USD 11.3 billion decrease of their aggregated profits in 2017 as their balance sheets for 2017 were severely impacted by a sharp increase in loss experience following the large-scale weather events in the second half of the year.

The USD 330 billion economic losses recorded globally resulted in insured losses amounting, according estimations, to USD 135 billion.

MUNICH Re, SWISS Re, HANNOVER Re, SCOR and BERKSHIRE HATHAWAY were not spared. Their cumulative profit is in sharp decline. From USD 9.530 billion recorded in 2016, this figure dropped to a loss of USD 1.820 billion in 2017, that is a decline in profits of USD 11.350 billion in one year.

Regarding technical results, combined ratios exceeded 100% for MUNICH Re (114.1%), SWISS Re (111.5%) and SCOR (103.7%). As for HANNOVER Re, this indicator deteriorated by 6.1 points but remains below 100 %(at 99.8%).

The overall premiums underwritten by reinsurance majors have also increased by 18.64%. Except for SWISS Re, which posted a 2.37% decline in turnover, MUNICH Re, HANNOVER Re, SCOR and BERKSHIRE HATHAWAY recorded double-digit growths of between 14 and 73.97%.

The combined shareholder's equity of the top five reinsurers has also improved by 17.9% to settle at USD 438.614 billion. SWISS Re has incurred a significant loss of USD 4.7 billion related to the 2017 natural disasters. MUNICH Re's compensation related to these events amounted to EUR 3.7 billion (USD 4.43 billion), EUR 2.7 billion (USD 3.23 billion) of which caused by Harvey, Irma and Maria hurricanes. BERKSHIRE HATHAWAY suffered an estimated loss of USD 2.4 billion due to the last year events.

Top 5 global reinsurers: main technical highlights (2016-2017)

Turnover (USD million) 2017 turnover2016 turnover2016/2017 evolution
MUNICH Re37 82133 15414%
SWISS Re3477535 622-2.37%
BERKSHIRE HATHAWAY(1)24 212(2)13 91773.97%
HANNOVER Re21 31317 23223.68%
SCOR Group17 71814 56921.6%
Total135 839114 49418.64%
  1. Figures from the 2017 annual report.
    (2) The 2017 revenue includes 10.2-billion aggregate excess-of-loss retroactive reinsurance agreement with all AIG's subsidiaries
Shareholder's equity (USD million) 2017 shareholder's equity2016 Shareholder's equity2016/2017 evolution
BERKSHIRE HATHAWAY(1)351 954285 42823.3%
SWISS Re34 29435 716-3.98%
MUNICH Re33 78233 4930.86%
HANNOVER Re11 12610 2648.39%
SCOR Group7 4587 0555.7%
Total438 614371 95617.9%
  1. Shareholder's equity of the group
Net result (USD million) 2017 net result2016 net result2016/2017 evolution
HANNOVER Re1 1481 650-30.42%
SCOR343640-46.41%
SWISS Re3313 558-90.6%
MUNICH Re1442 670-94.6%
BERKSHIRE HATHAWAY-3 6481 012-460%
Total-1 8209 530-119%
Combined ratio 2017 combined ratio2016 combined ratio2016/2017 evolution
HANNOVER Re99.8%93.7%+6.1 points
SCOR103.7%93.1%+10.6 points
SWISS Re111.5%93.5%+18 points
MUNICH Re114.1%95.8%+18.3 points
BERKSHIRE HATHAWAY-89.4%-


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