Reinsurers’ profitability up on underwriting, investments

Global reinsurance companies should continue seeing favorable earnings for the rest of 2024 and into 2025, according to a recent report by Fitch Ratings.

Non-life reinsurers posted improved underwriting profitability in the first half of 2024 from the first half of 2023, with manageable losses from catastrophes, the data showed. Premium growth is also likely to continue, although at a slowed rate amid a more competitive market.

Meanwhile, life and health reinsurer profitability varied based on mortality and morbidity experience, although revenue growth was strong.

Fitch Ratings said shareholders’ equity grew 6% in the first half of 2024 from the end of 2023 due to increased underwriting, investment income and equity market gains:

“Companies will continue to maintain very strong capitalization as they prudently manage capital, likely continuing to increase share repurchases and dividends in second half of 2024 and 2025 as growth opportunities lessen and investors demand return of capital.”

At the same time, merger and acquisition activity in the reinsurance market slowed in 2024 as market conditions shifted to organic growth, the data showed, with market valuations for companies moving higher, and making likely acquisitions more expensive.

Fitch Ratings said merger and acquisition activity could return as organic opportunities slow and the market inevitably turns soft again.

See also:

• U.S. cities most impacted by inflation in 2024
• Top global sugar exporter crippled by massive fires
• Ransomware persists, but cyber premiums are down