U.S. Reinsurers See Turnaround
By Daniel Hays
NU Online News Service, May 31, 9:03 a.m. EST?U.S. reinsurers in the first quarter saw a strong turnaround in business following wicked results posted at the end of last year, according to data from the Reinsurance Association of America.
The combined ratio for the industry was a near breakeven 101.8 for the three months ended March 31. This compares with 141.6 for the 12-months ended Dec. 31, 2001. In last year's first quarter, the industry posted a combined ratio of 106.4, an improvement over 2000′s first-quarter figure of 112.4.
"Awesome. You haven't seen [the combined ratio] that low in probably five years," commented Don Watson, managing director with Standard & Poor's in New York.
However, an analyst at Banc of America Securities, Seth Faler, said that while gross premiums written rose 19 percent for the quarter, there was only a 7 percent increase in net written premiums despite price increases by primary companies exceeding 20 percent. He attributed this to the fact that primary insurers are increasing retentions, while some reinsurers with European parent companies are ceding them more risk.
S&P's Mr. Watson said the fact that there had been a low catastrophe loss level in the quarter was "terrific," and Banc of America's analysis also noted that the combined ratio had benefited from favorable weather. Mr. Watson said he expects the eventual combined ratio will be somewhat higher for the full year.
The Washington-based RAA results for a representative sampling of individual companies follow alphabetically. Only seven companies reported a net loss.
? American Agricultural Insurance Company reported a combined ratio of 121.8 for the quarter; it reported a net loss of $6.8 million for the period.
? American Re-Insurance Company reported a combined ratio of 112.9 for the quarter; it reported a net gain of $37.6 million for the period.
? AXA Corp. Solutions Reinsurance Company reported a combined ratio of 102.9; it reported a net gain of $3.3 million.
? Berkley Insurance Company reported a combined ratio of 91.6; it reported a net gain of $6.6 million.
? Berkshire Hathaway Reinsurance Group reported a combined ratio of 59.3; net income was not available.
? CNA Re reported a combined ratio of 92.1. Net income was not available.
? Converium Reinsurance (North America) Inc. reported a combined ratio of 100.5; it reported a net gain of $18 million.
? EMC Reinsurance Company reported a combined ratio of 108.1; it reported a net gain of $368,000.
? Employers Reinsurance Corp. Group reported a combined ratio of 106.2; it reported a net gain of $68.4 million.
? Everest Reinsurance Company reported a combined ratio of 98.1; it reported a net gain of $43.4 million.
? Farmers Mutual Hail Insurance Company of Iowa reported a combined ratio of 101.9. Net income was not available.
? Folksamerica Reinsurance Company reported a combined ratio of 98.6; it reported a net gain of $4.2 million.
? General Re group reported a combined ratio of 104.4; it reported a net gain of $88.5 million.
? Gerling Global Reinsurance Corp. of America reported a combined ratio of 142.7; it reported a net loss of $54.7 million.
? Hartford Re Company reported a combined ratio of 100.9. Net income was not available.
? Insurance Corporation of Hanover reported a combined ratio of 110.9; it reported a net loss of $6.2 million.
? Odyssey America Re Corp./Odyssey Re Corp. reported a combined ratio of 98.1; it reported a net gain of $2.8 million.
? Overseas Partners US Reinsurance Company reported a combined ratio of 99.4; it reported a net loss of $8.9 million.
? Partner Re US reported a combined ratio of 105.3; it reported a net loss of $12 million.
? PMA Capital insurance Company reported a combined ratio of 96.9; it reported a net gain of $11.2 million.
? PXRE Reinsurance Company reported a combined ratio of 44.8; it reported a net gain of $19.8 million.
? QBE Reinsurance Corp. reported a combined ratio of 100.5; it reported a net loss of $7.6 million.
? Radian Reinsurance Inc. reported a combined ratio of 40.6; it reported a net gain of $29.3 million.
? SCOR U.S. Corp./SCOR Reinsurance Company reported a combined ratio of 111.4; it reported a net gain of $7.6 million.
? St Paul Re reported a combined ratio of 92.2. Net income was not available.
? Swiss Reinsurance America Corp. reported a combined ratio of 114.7; it reported a net gain of $7.5 million.
? The Toa Reinsurance Company of America reported a combined ratio of 102.1; it reported a net gain of $4.5 million.
? Transatlantic/Putnam Reinsurance Company reported a combined ratio of 98.1; it reported a net gain of $70 million.
? Trenwick America Reinsurance Corp. reported a combined ratio of 104.2; it reported a net loss of $3.9 million.
? XL Reinsurance America Inc. reported a combined ratio of 74.7; it reported a net gain of $33.8 million.
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