This report summarises key themes emerging from global (re)insurers’ financial results for the first nine months of 2022 and has been prepared by Gallagher Re’s Strategic and Financial Analytics team.
Key themes from Q3 and 9M 2022 global (re)insurance results:
- Year on year premium growth averaged 13% at 9M 2022, supported by improved pricing for commercial lines and reinsurance business.
- Despite increased loss activity in Q3 2022, underwriting performance remained strong through 9M 2022 with an average combined ratio of 96.9%, supported by continued double-digit premium growth, modestly lower natural catastrophe loss activity for the overall 9M period, and a reduced expense ratio.
- Realised and unrealised losses on equity/alternative investment assets contributed to lagging ROE performance in 9M 2022 (7.5% versus 12.4% in 9M 2021).
- Higher risk-free interest rates and retained profits supported an increase in average European solvency to 228% (FY 2021:226%).
- However, shareholders’ equity declined by 28% during 9M 2022, largely due to a rise in interest rates which resulted in lower market values of bonds and equities held by global (re)insurers.
- Credit rating agencies’ views of capitalisation fall in between these extremes, and ratings are likely to be assessed as the agencies review earnings performance and the impact of rising interest rates on (re)insurers’ capitalisation.
- Consensus 2023 earnings per share (EPS) estimates increased only marginally (+0.4%) following 9M 2022 results.