The 23 companies included in the study are Alleghany, Arch, Argo, Aspen, AXIS, Beazley, Everest Re, Fairfax, Hannover Re, Hiscox, Lancashire, Mapfre, Markel, Munich Re, Partner Re, QBE, Qatar Insurance, Renaissance Re, SCOR, Sirius, Swiss Re, Third Point Re and W.R. Berkley.
The ARA underwrites around 50% of the world's non-life reinsurance premiums and a large majority of the life reinsurance premiums. It is therefore a reasonable proxy for the sector as a whole.
Here are a few results found by Aon:
Global Reinsurer Capital - Aon estimates that global reinsurer capital fell by 3% to USD 585 billion over the year to 31 December. Traditional equity capital was estimated at USD 488 billion at the end of 2018, down USD 28 billion (-5%), relative to a year earlier.
ARA Capital - Total capital deployed by the ARA stood at USD 233 billion at 31 December 2018, a reduction of USD 13 billion (-5%), relative to a year earlier. Total equity fell by USD 16 billion (-8%), to USD 184 billion, of which USD 171 billion was related to common shareholders. Total debt rose by 4% to USD 48 billion, generating a debt to total capital ratio of 20.6%, up from 18.7% at the end of 2017.
Premium Income - Total gross premiums written (GPW) by the ARA climbed by 8% to USD 263 billion in 2018. Property and casualty (P&C) premiums rose by USD 19 billion, or 11%, to USD 194 billion, split primary insurance USD 108 billion (up 9%) and assumed reinsurance USD 86 billion (up 13%).
Earnings - The ARA reported pre-tax profit of USD 11.0 billion in 2018 (+53%) relative to 2017. Ordinary investment income rose by 7% to USD 22.2 billion, but the total return was impacted by an adverse swing of USD 10.0 billion in realized and unrealized capital gains. P&C underwriting profit of USD 1.3 billion was a significant improvement on the loss of USD 9.3 billion reported in 2017 and included favorable prior year reserve development of USD 5.3 billion.
Results - ARA net loss ratio stood at 66.8% (- 7.5 pp), while the expense ratio was 32.4% (+ 0.1 pp). The combined ratio decreased compared to prior-year, to 99.2% (106% in 2017).
Financial Strength Ratings - There has been only one rating downgrade in this period, while outlook changes have been modest and balanced overall. The 23 insurers A.M. Best ratings stood in A- to A+ range, while reinsurers' S&P ratings were between A- to AA- levels.
Full analysis can be found here: Aon's Reinsurance Aggregate FY 2018
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