Acquisitions drive big increase in collective GWP in Q1

24-05-2016

Bermuda’s re/insurance companies collectively enjoyed substantial growth in the first quarter of the year – but the gains were driven by acquisitions made by a small number of companies in the past 18 months, according to a report from S&P Global Ratings.

If the impact of these deals is removed, growth would be flat, the report said. It also warned that headwinds for the sector remain strong and pricing continues to decline in most lines.

Bermuda’s re/insurers’ consolidated gross written premiums (GWP) increased by 21% in the first quarter of 2016 while aggregated GWP increased to $16.12 billion compared with $13.38 billion in the same period in 2015.

But some of the headline deals last year have driven this growth. XL Group and Catlin Group reported increased GWP by 76 percent, the RenaissanceRe-Platinum Underwriters deal led to a 34 percent increase while Endurance Specialty’s acquisition of Montpelier Re increased GWP by 24 percent.

S&P suggested that some organic growth occurred in companies operating in lines of business such as accident and health insurance, UK motor reinsurance, and mortgage reinsurance.

But it said pricing and competition remained tough in most other lines such as agriculture, marine, energy, property, and property catastrophe.

S&P Global Ratings, Reinsurance, Insurance, Ratings, Bermuda

Bermuda Re