MS Reinsurance posts significant premium growth as CoR strengthens

Zurich headquartered global reinsurer MS Reinsurance (MS Re) has reported a 305% rise in net income to $81 million for the first quarter of the fiscal year, as the combined ratio improved to 89.7% from 94.2% a year earlier.

MS Re is part of global specialty re/insurer MS Amlin, which is part of the global non-life insurance group MS&AD.

For the opening quarter of the fiscal year, so January to March 2024, MS Re has reported an insurance service profit of $74 million, up $42 million from the $33 million posted a year earlier.

In terms of financial profit, this increased to $29 million from a loss of $3 million last year, driven by a reversal in insurance services expenses from -$45 million to a gain of $10 million, while investment income fell year-on-year, from $41 million to $19 million.

MS Re grew strongly in the quarter, posting a significant $553 million increase in net premium written to almost $1.8 billion, as net premium earned jumped $160 million to $714 million. The reinsurer attributes the top-line growth to continued business expansion through insurance clients with well-managed and diversified portfolios.

Incurred losses, including loss adjustment expenses, rose year-on-year by $72 million to $418 million, while the cost for acquisition and other operating expense moved up by $47 million to $222 million.

This solid quarterly performance, notes the firm, includes the Baltimore Bridge loss and the benefit of lower exposure to natural catastrophe losses in the quarter.

MS&AD has also released the quarterly results for MS Amlin Underwriting Limited (MS AUL), MS Amlin’s Lloyd’s market global re/insurer.

The Lloyd’s business also performed well in the period, achieving a £4 million (USD 5.1m) year-on-year rise in insurance service profit to £22 million (USD 28.1m).

The entity also produced a financial profit of £10 million (USD 12.8m) compared with a loss of £11 million (USD 14m) last year. The company attributes the turnaround to improved investment returns and lower discounting volatility as the result of effective asset-liability matching. In fact, investment income increased by £3 million (USD 3.8m) to £18 million (USD 23m), as the insurance service expense came down from -£26 million (-USD 33.2m) to -£9 million (-USD 11.5m).

Net premium written at MS AUL actually came down by £207 million (USD 264.1m) to £203 million (USD 259m), as net premium earned rose by £110 million (USD 140.4m) to £388 million (USD 495.1m). It’s important to note that the figures for net premium written and net premium earned have been adjusted following an accounting estimate change of delegated authority (binder) policies. On a like-for-like basis, premium growth remains positive, says the firm.

Incurred losses, including loss adjustment expenses, increased from £148 million (USD 188.9m) to £218 million (USD 278.2m), as the expense for acquisition and other operating expense rose from £115 million (USD 146.7m) to £148 million (USD 188.8m).

The Lloyd’s insurer and reinsurer’s combined ratio strengthened slightly year-on-year, moving from 95% to 94.3%, driven by profitable growth and improved underlying underwriting performance.

All in all, MS AUL’s net income improved significantly from a loss of $18 million (-USD 23m) last year to a gain of £11 million (USD 14m) this year.

As with MS Re, MS AUL’s results also includes the Baltimore Bridge loss and the benefit of lower exposure to natural catastrophe losses in the quarter.

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