Reinsurers ride investment returns in softening market
International insurers and reinsurers posted improved financial results in the first half of 2010, despite falling prices and large catastrophe losses.
The positive financial figures were largely attributed to increased investment returns compared to the previous year.
Munich Re, for example, saw its half-year 2010 earnings rise 5.3 percent to €1.19 billion, despite a 19.3 percent fall in its reinsurance result, due partly to the effects of the Chile earthquake, its third-largest catastrophe loss.
Much of the first half gain came from a 42.8 percent rise in the investment result, to €5.09 billion. Munich Re said much of the investment gain was due to currency translation effects and a decline in risk-free interest rates.
A similar trend was reported by Swiss Re, which saw total return on investments for the second quarter at 13.2 percent. CNA Financial Corporation in the US said its turnaround in results could largely be attributed to its investment portfolio, which rebounded in 2010.
Markel International, the London-based division of US insurance group Markel Corporation, said a strong investment performance underpinned its positive first half results, which saw shareholder’s equity increase by 3 percent despite a combined ratio of 112 percent. Underwriting losses included claims from the Chile earthquake and the Deepwater Horizon oil rig explosion.
