The biggest insurers in Asia—and what they cede
Every reinsurer and broker will want to know how much reinsurance insurers are buying and whether this might increase. S&P Global Market Intelligence has ranked 25 of the biggest insurance groups in the region and detailed, where possible, their cession ratio.
The reinsurance industry—and everything at conferences such as the EAIC—exists, operates and turns on the back of the internal strategies, business plans and risk appetite of the world’s insurers. They generate the risk, and the reinsurance industry protects them against the big losses.
At least, it was once that simple. These days, insurers are also reinsurers—and vice versa—and a plethora of risk transfer mechanisms exist from the simple yet innovative to the downright opaque, all so often these days with the pervading influence of alternative or third party capital also being put to work in some form.
The markets in Asia are less complex in this sense than in other parts of the world. Nevertheless, while it used to be relatively straightforward to establish who the biggest users of reinsurance are, this is no longer true.
It is, however, possible to rank the region’s biggest insurers and look at their ceded ratio, which is what S&P Global Market Intelligence has done in supplying these numbers.
The insurers here were selected and initially ranked by their P&C net written premiums. While a good starting point for this data, it also means that there may be some companies outside the 25 companies featured here which cede more than those included, but which do not appear.
S&P has also detailed the P&C gross written premiums and the cession ratio of these companies. It should be noted that, because of the way they report their results, this is not available for Japanese players but we have included the figures that are available to give a sense of their size and importance in the Asian markets.
It should be noted that some vagaries will underpin this data and ceded premiums don’t necessarily reflect conventional reinsurance spend.
Quite often fronted business (ceded 100 percent) will be included as well. This particularly applies to some of the big primary insurance groups.
Equally, switching from non-proportional to proportional cover, or vice versa, can have a significant influence on the reported numbers. Other inconsistencies exist because some companies only report gross earned premiums—including Japanese companies, which don’t report gross premiums at all.
It should also be noted that life insurers often have very low ceded ratios and there are several examples in this list.
Nevertheless, these figures will make interesting reading for reinsurers. There are a few trends worthy of note.
One is that while the majority of insurers’ reinsurance spend is relatively stable, there are a few examples of its increasing substantially. Without a thorough interrogation of insurers’ results and corporate strategy, it is hard to say exactly why, but it could be a mixture of taking advantage of opportunities delivered by the soft market and/or increased premiums in the aftermath of losses.
The other possibility is that in some cases this number may well be skewed by fronting arrangements or other risk transfer instruments; for some of these companies it may also be attributed to new risk transfer strategies they have implemented in recent years.
Source of data: S&P Global Market Intelligence
