US-Bermuda reinsurers’ poised to sustain strong performance in 2024: AM Best

AM Best reports that the U.S. and Bermuda reinsurance composite is maintaining its positive momentum and is set to continue its strong performance from 2023 into 2024.

The U.S.-Bermuda composite recorded its third consecutive year of improved underwriting profitability in 2023, according to a recent report by AM Best.

The firm believes that, provided the forecasted high levels of Atlantic hurricane activity do not materialise in the remaining months of 2024, companies within the composite have sufficient capital to pursue attractive market opportunities.

The report also notes that while reinsurance catastrophe pricing has eased, capacity remains selectively constrained. Meanwhile, strong investment results have bolstered underwriting margins. The composite’s combined ratio for 2023 was 85.1%, a 6.4 percentage point improvement over the previous year. Total net premiums written grew by 3.3% in 2023, compared to 15.5% growth in 2022, and 19.7% in 2021.

Greg Dickerson, Director of AM Best, stated, “We expect that premiums for this U.S.-Bermuda composite will increase in 2024 to levels closer to 2023, reflecting the high ongoing demand for reinsurance capacity, bolstered by underlying exposure growth.”

Strong realised and unrealised investment gains, coupled with higher net investment income, also contributed to strong net earnings in 2023. The composite posted a 23% return-on-equity (ROE) ratio in 2023, a sharp recovery from the -2.4% ROE in 2022, when significant pre-tax realised/unrealised investment losses offset the group’s solid operating performance.

This website states: The content on this site is sourced from the internet. If there is any infringement, please contact us and we will handle it promptly.