Monte Carlo Rendezvous: Top 10 reinsurers dominate 62% of global market

The global reinsurance market in 2013 saw an increase in market concentration, with the top 10 reinsurers representing 62% of the market compared to 56% in 2000 and just 22% in 1980. Looking at the life and non-life reinsurance segments, the numbers revealed that the life reinsurance market was much more concentrated than non-life, with the top five players controlling 79% and 40% of the respective markets, said Rendez-vous de Septembre (RVS) Association Chairman Claude Tendil at the official RVS press briefing in Monte Carlo yesterday.

He added that the top rankings were expected to “remain stable” and that the concentration of the market would “continue into 2015”.

The top 10 reinsurers in 2013 also remained unchanged from 2012 – Munich Re and Swiss Re continue to remain in the top 2 spots, followed by Hannover Re, Berkshire Hathaway, SCOR, Lloyd’s, RGA, China Re, Partner Re and Everest Re, respectively.

For reinsurance brokers, Mr Tendil noted that “not much has changed” with Aon Benfield, Guy Carpenter and Willis leading the pack. However, he said that there “could be changes in the coming months”, perhaps seeing more consolidation in the market.

Rounding up the industry’s performance in 2013, he said that the global reinsurance market had increased its turnover by 5.7% to clock in US$240 billion, whilst global insurance turnover was just 0.6%. Cession rates had also remained stable compared with statistics from the previous year. “Reinsurance has increased thanks to rate rises for certain types of natural catastrophe coverage affected by the events of 2011 and 2012,” he added.

Turning to Nat CAT occurrences, there were less natural events in 2013 (890 events) than in 2012 (905). Further, in terms of economic and insured costs, 2013 fared better with $135 billion (vs $170 billion in 2012) and $35 billion (vs $70 billion in 2012) respectively. Notwithstanding, last year’s events caused more victims (20,500) as compared to the 9,600 in 2012.

For the first half of 2014, the number of claims has been slightly higher than the average for the last ten years (490 vs 410). However, in terms of costs, economic cost at $42 billion is less than half of the 10-year average of $95 billion, whilst insured cost has been clocked at $17 billion compared to the 10-year average of $25 billion.

Although 2014 has yet to come to a close, “for the moment”, Mr Tendil expects it to be another “average year, but maybe with slightly higher costs than 2013”. He added that while the first half of the year had seen some high claims, notably from aviation and war disasters, the estimates are “not too precise yet”.

Source: eDaily