This week, ICMIF Supporting Member Willis Re published its latest assessment of global (re)insurers’ financial health. This short report summarises key themes emerging from global (re)insurers’ 2021 H1 results and has been prepared by Willis Re’s Strategic and Financial Analytics teams.
The key takeaways from the report are:
Continued favourable pricing, particularly for commercial lines business, supported meaningful premium growth for the majority of the (re)insurers tracked by Willis Re.
Underlying combined ratios improved significantly in H1 due to rate increases outstripping claim trends. Headline combined ratios also improved, supported by lower than normal personal lines loss frequency, and, for many, robust reserve releases, and came despite a higher than average level of nat cat losses.
European solvency ratios improved at H1 21, largely returning to end-2019 pre-COVID levels. H1 21 solvency improvement was mainly due to a rise in risk free interest rates compared to year-end 2020 levels. This provided a boost to sector solvency as the reduction in liabilities, which are discounted at risk-free rates under Solvency II, exceeded the reduction in bond portfolio values. Rising equity markets and retained profitability also provided support.
As was the case following Q1 results, analyst consensus earnings estimates edged up due to higher than anticipated premium growth and underlying profitability.
Despite the strong H1, two concerns weigh on the outlook: the decelerating rating environment and the prospect of higher inflation.
Download the report here.