The 93.9 combined ratio reported this past quarter by the 26 U.S. reinsurers reflects a 68.2 loss ratio and a 25.7 expense ratio.

U.S. reinsurers also reported little change in aggregate net income, which was $1.44 billion for the 2005 first quarter–up 1 percent from $1.42 billion last year. Net written premiums, however, fell 10.4 percent, to $7.01 billion from $7.82 billion.

According to the RAA survey, aggregate policyholder surplus was $61.68 billion, up 9.7 percent from $56.21 billion a year ago.

“This first-quarter combined ratio looks pretty strong, but there is also a seasonal aspect involved here,” Fitch Ratings analyst Mark Rouck commented.

“Obviously the main hurricane season hasn't happened yet, and as to the extent companies do reserve studies, that tends to happen in the fourth quarter,” Mr. Rouck noted.

He also observed that U.S.-based reinsurer combined ratios continue to lag behind those in other marketplaces such as Bermuda.

“When you look at the broader spectrum of reinsurers, including the Bermuda-domiciled companies, those combined ratios in aggregate have been better than what the RAA ratios have been for U.S.-based reinsurers,” Mr. Rouck noted.

Commenting on falling net written premiums, Mr. Rouck said there are two main factors driving this decline.

o First, “there are just some pressures on rates overall. Our view is that the rates have been under pressure for some time now and that's starting to impact these results,” he said.

o Second, since the RAA data comes from a small universe of U.S. companies, it tends to be driven by a few large U.S.-based reinsurers, some of which have been pruning their books of business, he added.

“When you look at GE Insurance Solutions, its numbers dropped off by almost 25 percent year-over-year,” Mr. Rouck said. Indeed, GE Insurance Solutions' net written premiums for the 2005 first quarter were $615 million–down from $800 million a year ago.

National Indemnity's net written premiums were also down significantly–falling 28 percent to $928 million from $1.288 billion, while General Re Group saw its net written premiums fall 30 percent to $505 million from $723 million.

Looking at best performers in major categories for the 2005 first quarter, Trenwick America Reinsurance Corp. had the lowest combined ratio among U.S. reinsurers, at 45.3, while National Indemnity Company had the biggest underwriting profit–$261 million.

GE Insurance Solutions had the largest net income, at $536 million, helped by its federal and foreign income tax benefit that came out to be $374 million. National Indemnity's $928 million net written premiums were the biggest among the group.

Flag: By The Numbers

U.S. Re Sector Steady

? $1.44 Billion–net income, up 1 percent from a year ago.

? 93.0–combined ratio, down 0.1 points.

? $7.01 Billion–net written premiums, down 10.4 percent.

? $61.68 Billion–policyholder surplus, up 9.7 percent.