Berkshire becomes top 3 reinsurer, surpasses SCOR and Hannover Re
Berkshire Hathaway became the world's third-largest reinsurer in 2017 driven by the $10.2 billion American International Group (AIG) deal, pushing Hannover Re and SCOR to fourth and fifth place, respectively, according to S&P Global Market Intelligence.
In 2017, AIG entered into an adverse development reinsurance agreement with National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway.
Under the agreement, NICO assumed 80 percent of the net losses and net allocated loss adjustment expenses on the subject reserves in excess of the first $25 billion. NICO’s overall limit of liability under the agreement is $20 billion.
Berkshire collected $10.2 billion premium for reinsuring $20 billion of AIG's old long-tail liabilities.
The deal made Berkshire jump three spots to take its place in the top three global reinsurers with $22.74 billion reinsurance premiums written assumed in 2017. Top 1 remains Munich Re with $35.67 billion reinsurance premiums written assumed, up 2.46 percent year on year, followed by Swiss Re with $29.95 billion, shrinking 4.01 percent year on year.
Hannover Re dropped to the fourth place in the ranking of the biggest global reinsurers with $20.10 billion reinsurance premiums written assumed in 2017 and SCOR ended on fifth place with $16.71 billion, despite growth in both firms' gross reinsurance premiums written.
While Lloyd’s of London was ranked sixth place with $13.61 billion reinsurance premiums written assumed in 2017, the combined AXA and XL Group, which are in a merger process, would have taken the seventh place with a combined $11.75 billion.
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