The softening property-casualty market sent U.S. reinsurance premiums down steeply last year, but the business being written remains just as profitable, an industry group's survey and analysis reveals.
A group of 20 U.S. propertycasualty reinsurers wrote $22.7 billion of net premiums during the 12 months ended Dec. 31, 2007, compared with $25.8 billion written during the same period in 2006--a 13.6 percent fall, according to an analysis of reinsurer statutory underwriting results by the Reinsurance Association of America.
The RAA report found that despite the downward trend in premiums, the combined ratio for the group of reinsurers was 94.7--a slight improvement over the 94.9 figure reported for the same period in 2006.
The combined ratio is attributable to a 65-point loss ratio and an expense ratio of 29.7, according to the Washington-based RAA. For the same period in 2006, the loss ratio was 67.1 and the expense ratio was 27.8. Policyholders' surplus on Dec. 31, 2007 was $75.9 billion, up a bit from $74.5 billion for the same period in 2006.
Net premiums written were lower for some reinsurers in 2007 and higher for others. For example, Swiss Re America Corp. booked $1.49 billion in 2007--significantly less than the $3.09 billion written in 2006--while National Indemnity booked $3.6 billion in 2007, down from $4.1 billion in 2006.
Transatlantic/Putnam Reinsurance Company, on the other hand, had net written premiums of $3.6 billion in 2007, up from $3.3 billion in 2006, while Endurance Reinsurance Corp. of America had net written premiums of $366 million in 2007, compared to $322 million in 2006.
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