NU's listings rank individual reinsurance companies rather than groups, using information from annual statements filed with U.S. regulators and compiled by Highline Data, an NU affiliate.
As in recent past years, NU has ranked reinsurers based on the volume of premium they assumed from non-affiliates. Companies eligible for the ranking meet the following criteria:
o Premiums assumed from non-affiliates are more than 55 percent of gross premiums, or "Re" is part of company or group name.
o Premiums do not relate exclusively to mortgage, credit, warranty or other guaranty lines.
This broad definition also captures some program writers and agency captives that assume all of the premiums written on fronting carrier paper, as well as Florida take-out companies and companies involved in one-off loss portfolio transfers to facilitate ownership transfers.
In fact, the word "reinsurance" appears only sporadically among titles of companies ranked below the top 25–a level at which qualifying reinsurers write $120 million or less in non-affiliate assumed premiums.
Several of the NU Top-25 reinsurers would not make the list if companies had been ranked by net premiums rather than assumed reinsurance premiums.
Some notable facts about relationships between net and gross (direct plus assumed) premiums for individual companies include the following:
o The average net-to-gross premium ratio for the top-25 reinsurers is 65 percent. Reinsurers with much lower ratios include XL (33 percent), Everest (30 percent), Arch and Harbor Point Reinsurance (20 percent).
o Net-to-gross ratios were much higher in 2008 than 2007 for Platinum, XL and AXIS, which each reported declines in assumed reinsurance premium but large jumps in net premiums.
o Everest, with a lower net-to-gross ratio in 2008 than 2007, reported a steep decline in net written premiums.
o As a group, the top-25 reinsurers ceded 25 percent of gross premiums to affiliates, but three of the top 25 ceded more than 50 percent to affiliates. For all three–Everest, Arch and Harbor Point–nearly 100 percent of these cessions were to unauthorized affiliates.
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