Everest Re sees growing reinsurance demand from large cedants
The Everest Re CEO sees demand for reinsurance growing from large insurers driven by consolidation in the sector.
In the reinsurance segment, Everest Re increased gross written premiums to $1.43 billion in the first quarter of 2018 from $1.17 billion in the same period a year ago.
“Industry consolidation oddly plays a part in that due to large buyers needing capacity and quality markets that can support that,” Everest Re CEO Dom Addesso said during the first quarter 2018 results conference call.
The CEO of the reinsurance division John Doucette, added: The fact that there is a lot of M&A, and activity and discussion, we think does present opportunities for us particularly on the reinsurance side.”
The sector has seen major M&A transactions recently such as the AIG acquisition of Validus and AXA buying XL Group.
The consolidation has resulted in large global insurers buying more reinsurance, driving business to Everest, attracted by its “strong balance sheet”, and the fact that Everest writes P&C lines of business all over the world, Doucette explained.
“Their capacity demands are increasing and we’re seeing some of the large global insurers buying more and buying more in the casualty and professional lines,” he explained the growth in the first quarter of 2018 in the reinsurance segment.
In reinsurance, the combined ratio deteriorated to 92.2 percent in the first quarter from 82 percent in the same period a year ago, impacted by $100 million of losses emanating from the California wildfires in the US operations.
Overall, Everest Re group reported first quarter 2018 net income of $210.3 million compared to net income of $291.6 million in the same period a year ago. Gross written premiums for the quarter were $1.9 billion, an increase of 21 percent compared to the first quarter of 2017.
The group combined ratio was 93.3 percent for the quarter compared to 86.0 percent in the first quarter of 2017. Excluding the catastrophe losses arising from the 2017 Northern and Southern California wildfires, the attritional combined ratio was 87.1 percent compared to 84.5 percent in the same period last year.
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