April 2nd, 2009

USD6.1bn Loss for Global Reinsurance Composite

Posted at 1:00 AM ET

klein_chris_bioChristopher Klein, Managing Director and Head of Global Business Intelligence

With data for 16 of the 20 companies in the Guy Carpenter Global Reinsurance Composite available, an aggregate loss of USD6.1 billion has emerged. This stands in stark contrast to 2007’s aggregate net income of USD18.4 billion. The companies in the Global Reinsurance Composite that have reported their full-year 2008 financial results show a combined return on equity (ROE) of -6.2 percent.


Unrealized investment losses are the primary reason for this drastic year-over-year change. Excluding unrealized changes in investment values, seven carriers would have reported profits. Members of the Global Reinsurance Composite sustained unrealized losses totaling USD14.3 billion last year … compared to an aggregate gain of USD42 billion in 2007. Realized losses were a problem, as well. A gain of USD4 billion in 2007 became an aggregate loss of USD7.4 billion for full-year 2008.

Underwriting performance remained largely profitable, though impaired by the 2008 hurricanes - particularly Gustav and Ike. Aggregate property and casualty (P&C) underwriting profits reached USD1.2 billion for the companies in the Global Reinsurance Composite that have reported. This is down 78 percent year-over-year. Only three companies reported P&C underwriting losses. A sharp reduction in losses occurred among European life reinsurers, as they were able to mitigate the overall deficit.

This analysis will be updated as the remaining companies in the Global Reinsurance Composite release their full-year 2008 results.

Read Shareholders’ Funds Down 18% for Global Reinsurance Composite >>

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