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A.M. Best Special Report: Market Leaders Continue Dominance of A.M. Best's Top 50 Ranking of Global Reinsurers
[September 07, 2016]

A.M. Best Special Report: Market Leaders Continue Dominance of A.M. Best's Top 50 Ranking of Global Reinsurers


The top 10 positions within A.M. Best's annual ranking of the Top 50 Global Reinsurers held steady despite some slight reshuffling. Munich Re, Swiss Re and Hannover Re continue to occupy the first, second and third spots, respectively, as they have since 2010, according to A.M. Best's annual special report on the global reinsurance industry. SCOR S.E. and Lloyd's slipped into the fourth and fifth slots, respectively, ahead of Berkshire Hathaway, which dropped to sixth, according to the new Best's Special Report, "Innovation: The Race to Remain Relevant." The 2016 ranking is based on gross premiums written for 2015, with the top 10 comprising 70% of the market.

"What we've seen from Berkshire Hathaway is that they recognize that reinsurance opportunities are not where they need to be from a pricing perspective," A.M. Best Vice President Robert DeRose said. "They have pulled capacity back from that particular aspect of the market and they are building out insurance strategies."

DeRose noted that Berkshire Hathaway is specifically building out that capacity through Berkshire Hathaway Specialty Insurance Co. Also, Berkshire Hathaway, through its General Reinsurance Corp. franchise, has entered into a five-year agreement under which Transatlantic Reinsurance Co. will serve as its exclusive underwriter for U.S. and Canadian property/casualty treaty reinsurance business.

These developments and others help illustrate a major challenge for reinsurers amid competitive market conditions, which include robust capacity and ongoing low investment yields - identifying a sweet spot at which relevance and innovation co-exist and help a company trive.



"There have been a lot innovative initiatives on the part of reinsurers to really try to round out their operations, find ways to have access to capacity and be well-positioned for the challenges that the market is currently providing," DeRose said.

In addition to organic growth initiatives, mergers and acquisitions continued to play a role and underscored two noteworthy shifts in the Top 50 ranking. RenaissanceRe climbed six spots to No. 20, driven by the completion of its acquisition of Platinum. Arch moved up five places to No. 22, attributable to the consolidation of Watford Re into its operations.


Other highlights from this year's report include:

  • Alternative capacity continues to fuel strong price competition. A.M. Best currently estimates that alternative capital represents approximately USD 71 billion of capacity, roughly 20% of the total dedicated capacity of the reinsurance market.
  • The global reinsurance report also includes A.M. Best's analysis of hedge fund reinsurers and the alternative capital market, along with in-depth reviews of the Lloyd's and life reinsurance markets, as well as geographic regions such as Brazil, Asia/Pacific and Africa.

To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=253443.

A.M. Best will present a webinar, "The State of the Global Reinsurance Market," on Thursday, Sept. 8, 2016, starting at 10 a.m. EDT. A.M. Best analysts will cover recent developments in the Americas, Europe, the Middle East and Asia, as well as A.M. Best's annual ranking of leading global reinsurers. Register at no charge at www.ambest.com/webinars/reinsurance16.

A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2016 by A.M. Best Rating Services, Inc. ALL RIGHTS RESERVED.


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