At 8.1%, revenue growth in the reinsurance market remained strong in 2024, a slight increase compared to the 7.6% seen in 2023, according to reinsurance broker Gallagher Re.

According to the broker’s full-year 2024 reinsurance market report, which tracks the capital and profitability of the global reinsurance sector, the growth experienced last year was driven by continued rate increases for property and casualty reinsurance.

In contrast, exposure growth stayed low as companies looked to reduce their exposure to US casualty business.

Notably, nearly half of the companies within Gallagher Re’s “SUBSET” group reported double-digit revenue growth; the most significant rises were due to targeted expansion in the hard market.

Fidelis’ growth, at 39%, was organic with increased new business and rate increases. RenaissanceRe’s 35% growth was driven by the acquisition of Validus Re from AIG.

While most of the companies reported revenue growth in 2024, two notable exceptions were AXIS Capital and SCOR, both of which experienced declines.

AXIS’ premium reduction was due to an increase in premiums ceded to its strategic capital partners; gross premiums actually increased by 8%. SCOR’s revenue declined because it reduced its US casualty exposure and increased retrocessions.

The “SUBSET” companies highlighted in the report are a segment of Gallagher Re’s broader “INDEX” companies, which collectively represent over 80% of the reinsurance industry’s capital.

This SUBSET includes Arch Capital, AXIS Capital, Everest Re, Fairfax, Fidelis, Hannover Re, Lancashire, Markel, Munich Re, QBE, RenaissanceRe, SCOR, SiriusPoint Re, Swiss Re, WMIG Ark, and WR Berkley.

The SUBSET is defined as those companies that make the relevant disclosure in relation to natural catastrophe losses and prior-year reserve releases

Gallagher Re’s analysis also indicated a continued reduction in both the underlying and reported combined ratios for the SUBSET companies in 2024.

“The introduction of IFRS 17 as of 2022 FY for the majority of IFRS 17 reporters in the SUBSET and as of 2023 FY for Swiss Re has led to material improvements in reported combined ratios, thanks to the introduction of discounting leading to a lower loss ratio and ceding commissions being deducted from revenues rather than being reflected in expenses,” analysts stated.

According to the report, in 2024, Swiss Re’s reported combined ratio, restated from the 2023 basis due to the transition to IFRS 17, showed continued improvement, decreasing by 0.5 percentage points, from 87.3% to 86.8%.

This improvement was primarily fuelled by a 3.2 percentage point reduction in the ex-nat cat accident year loss ratio and despite lower reserve releases (+1.2ppts), a heavier impact from natural catastrophes (+0.6ppts) and a higher expense ratio (+0.7ppts).

Analysts also noted that the normalised natural catastrophe loss decreased from 9.4% in 2023 to 9.0% in 2024.

This reduction is attributed to the replacement of 2019, a year with heavier natural catastrophes, with 2024’s lighter natural catastrophe losses, within the broker’s five-year average calculation.

Analysts added: “While the delta between actual and the normalized natural catastrophe losses reduced from a 2.4ppts benefit in 2023 FY to a 1.4ppts benefit in 2024 FY, the lower ex-nat cat accident year loss ratio drove a 3.0ppts reduction in the underlying combined ratio to 93.0%, which also proved to be the strongest level achieved since the Reinsurance Market Report started in 2014.”

The average reported combined ratio for the SUBSET companies decreased, largely influenced by substantial improvements reported by Hannover Re and Munich Re, both significant contributors to the group.

These companies demonstrated notable reductions in their attritional combined ratios. However, a majority of the SUBSET, specifically 10 out of the 16 companies, experienced an increase in their combined ratios in 2024.

Markel was the only SUBSET company reporting a combined ratio over 100% in the year. This result was mainly due to the company experiencing higher attritional loss ratios in professional liability and general liability lines.

In 2023, Markel’s combined ratio was also over 100%, driven by adverse prior-year reserve development in casualty lines.

Axis Capital recorded the most significant improvement in its reported combined ratio among the SUBSET companies, decreasing from 107.6% in 2023 to 91.8% in 2024, representing a 15.8 percentage point improvement.

Swiss Re reported a 4.9ppts deterioration in its combined ratio, going from 85% in 2023 to 89.9% in 2024, mainly driven by a significant strengthening of its US liability reserves.

SiriusPoint Re, and RenaissanceRe also experienced notable deteriorations in their combined ratios (+8.0ppts and +6.0ppts, respectively) driven by increased natural catastrophes, and for SiriusPoint, by non-repeating favourable reserve development in 2023.

The ex-nat cat accident year combined ratio improved 2.4ppts across the SUBSET. The improvement is largely attributed to Hannover Re and Munich Re reporting lower levels of buffer building in 2024 compared to 2023, and to a continued improvement in the operating environment.

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