Does size really matter?
As ratings become ever more important to the reinsurance industry, analytical firm Litmus Analysis examines the ratings of the world’s 40 biggest reinsurance groups using a unique methodology to establish their average ratings. Stuart Shipperlee, partner at Litmus, describes some of the chart’s findings.
Standard & Poor’s (S&P) Global Reinsurance Highlights report published each year in September has become something of an institution in its 20-year history, even if the provenance of the name is long forgotten (it was originally the ‘highlights’ from a larger report that proved prohibitively expensive to mail out in a pre-digital world).
In its Top 40 group ranking table the agency uses net reinsurance premiums as the key metric. However, despite the purely reinsurance premium volume focus, a quick glance at the list highlights an often unnoticed aspect of the reinsurance market: a lot of capacity comes from large primary groups (or those with major primary operations). Of course, a premium number alone doesn’t tell us about the ‘nature’ of that capacity. Nonetheless in absolute terms it represents a significant part of the market.
In our table for Intelligent Insurer we have used a different ranking basis: the average rating of the ratings, calculated via the ‘Litmus Composite Score’ methodology, which the core carriers of each group receive from the four main agencies—AM Best, Fitch, Moody’s and S&P.
