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![Page 1: Reinsurance Market Overview June 2003. Non-life and Life Premiums by Country $U.S. Billions (2001) North America485.0464.4949.439.4% Western Europe284.1455.6739.730.7%](https://reader030.fdocuments.us/reader030/viewer/2022032804/56649e425503460f94b34ea4/html5/thumbnails/1.jpg)
Reinsurance Market
Overview
Reinsurance Market
Overview
June 2003
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Non-life and Life Premiums by Country$U.S. Billions (2001)Non-life and Life Premiums by Country$U.S. Billions (2001)
North America 485.0 464.4 949.4 39.4%
Western Europe 284.1 455.6 739.7 30.7%
Japan 89.1 356.7 445.8 18.5%
Australia & Nz 14.4 21.2 35.6 1.5%
Subtotal 872.6 1,297.9 2,170.5 90.1%
South & East Asia 41.7 96.8 138.5 5.8%
Latin America & Caribbean 27.6 13.6 41.2 1.7%
Central & Eastern Europe 13.9 8.8 22.7 .9%
Middle East/Central Asia 7.0 3.9 10.9 .5%
Africa 6.3 18.2 24.5 1.0%
Subtotal 96.5 141.3 237.8 9.9%
World 969.1 1,439.2 2,408.3 100%
Non-LifePrem
LifePrem
TotalPrem
MktShareDeveloped Countries
Emerging Countries
Source: Sigma
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Worldwide P & C Reinsurance Demand Worldwide P & C Reinsurance Demand
Other11%
Japan12%
Western Europe
34%
North America
43%
Source: A.M. Best
$107 Billion
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Market Share of Global Reinsurance IndustryMarket Share of Global Reinsurance Industry
France4%
Germany29%
Japan 5%
U.K.9%
Switzerland9%
Bermuda8%
U.S.27%
Other6%
Ireland3%
Source: Standard & Poor’s
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Top 10 Largest Global ReinsurersRanked by 2001 Net Premiums Written Top 10 Largest Global ReinsurersRanked by 2001 Net Premiums Written
Munich Re Group
Swiss Re Group
Berkshire Hathaway
Employers Re Group
Lloyd’s of London
Hannover Ruck Group
$16,610,700
5,746,100
8.7
6.6
16.3
-11.1
45.4
7.1
30.0
-16.3
74.7
25.9
Company 2001%
Change
Source: Standard & Poor’s (Oct 2002) (000’s)
2000
$15,276,600
14,478,800
8,591,000
7,924,000
3,952,900
4,117,000
2,809,800
3,726,500
1,424,700
4,994,300
SCOR Re Group
Axa Re Group
Gerling Global Re Group
Allianz Re Group
15,429,100
9,991,000
7,047,000
4,408,300
3,651,300
2,489,100
6,287,200
3,118,500
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Top 10 Largest Global ReinsurersShareholders’ Funds Top 10 Largest Global ReinsurersShareholders’ Funds
Munich Re Group
Swiss Re Group
Berkshire Hathaway
Employers Re Group
Lloyd’s of London
Hannover Ruck Group
$14,920,200
6,140,500
-23.2
-4.5
-25.35.6
-25.7
-53.2
-3.7
-2.9
-19.7
0.0
Company 2001%
Change
Source: Standard & Poor’s (Oct 2002) (000’s)
2000
$19,437,000
14,139,400
39,580,000
6,025,000
8,268,400
1,452,300
1,212,800
53,414,300
1,628,200
1,481,500
SCOR Re Group
Axa Re Group
Gerling Global Re Group
Allianz Re Group
13,505,900
29,549,000
6,362,000
680,100
1,167,500
1,307,800
1,481,100
51,886,300
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Top 10 Largest Global ReinsurersCombined Ratio’s Top 10 Largest Global ReinsurersCombined Ratio’s
Munich Re Group 122.4% 135.1% 115.3%
Swiss Re Group 104.0 124.0 117.0
Berkshire Hathaway 100.0 138.0 110.7
Employers Re Group 163.6 139.3 115.8
Lloyd’s of London 98.6 140.0 N/A
Hannover Ruck Group 103.0 107.8 106.6
Company 2002 2001 2000
Source: Standard & Poor’s (Oct 2002)
SCOR Re Group 120.1 124.0 121.0
Axa Re Group 127.1 120.6
Gerling Global Re Group 131.5 112.7
Allianz Re Group 127.3 108.9
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Combined RatioU.S. P & C vs. Reinsurance IndustryCombined RatioU.S. P & C vs. Reinsurance Industry
100
105
110
115
120
125
130
135
140
145
'80
'81
'82
'83
'84
'85
'86
'87
'88
'89
'90
'91
'92
'93
'94
'95
'96
'97
'98
'99
'00
'01
'02
Per
cent
P&C Ind Re Ind
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U.S. Reinsurance Composite-One Year Loss Development / NPEU.S. Reinsurance Composite-One Year Loss Development / NPE
-4-202468
1012141618202224262830
'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02
Per
cen
t
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Worldwide Property Catastrophe LossesWorldwide Property Catastrophe Losses
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
'85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02
USA Non-US
Source: Sigma
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S&P Rating Migrations Among theTop 150 Reinsurers*
S&P Rating Migrations Among theTop 150 Reinsurers*
0
5
10
15
20
25
30
AA
A
AA
+
AA
AA
-
A+ A A-
BB
B+
BB
B
BB
B-
BB
+
BB
BB
-
B+ B-
CC
C
Rating as at Dec. 31, 2001 Rating as at Feb. 2003
* Ranked by net premiums written.
No. of reinsurers
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AM Best Rating Distribution-2001Domestic Property/Casualty AM Best Rating Distribution-2001Domestic Property/Casualty
Personal Lines
47%
47
6
Reinsurers
Source: AM Best Co. data as of December 2001.
Commercial Lines
10%
53
23
A++, A+
A, A-
B++, B+
Rating Category
11%
44
27
10087Secure 82
013Vulnerable 18
100%
30
Mixed
100%
577
Negative
Total
Rating Outlook
Total Group Ratings
100%
433
Negative
Total P/CTotal P/C
12%12%
4949
2525
8686
1414
100%100%
10401040
NegativeNegative
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AM Best Rating Distribution-2002Domestic Property/Casualty AM Best Rating Distribution-2002Domestic Property/Casualty
Personal Lines
30%
54
13
Reinsurers
Source: AM Best Co. data as of December 2002.
Commercial Lines
7%
57
23
A++, A+
A, A-
B++, B+
Rating Category
11%
47
23
Total P/CTotal P/C
9%9%
5353
2323
9787Secure 81 8585
313Vulnerable 19 1515
100%
30
Mixed
100%
551
Mixed
Total
Rating Outlook
Total Group Ratings
100%
417
Mixed
100%100%
998998
MixedMixed
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2002 US Reinsurance Recoverables 2002 US Reinsurance Recoverables
Reinsurance Recoverables on: Paid Losses $18,205 M Unpaid Losses 89,303 M IBNR Losses 95,831 M Unearned Premiums 32,861 M Sub-total 236,200 M Funds Withheld -28,106 M Total Recoverable $208,591 M
Source: A.M. Best Co.
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2002 US Reinsurance Recoverables 2002 US Reinsurance Recoverables
Reinsurance Recoverables $209 B
Admitted Assets $1,034 B Reins. Recov / Ad. assets 20%
Industry Surplus $287 B Reins. Recov / Surplus 72%
Source: A.M. Best Co.
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Security AssessmentSecurity Assessment
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Trend orientedcompared to peer norms
Quantitative FactorsQuantitative Factors
Profitability Liquidity Leverage Capital adequacy Ratings
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Qualitative FactorsQualitative Factors
Management experience Spread of risk — catastrophic exposure Asset quality & diversity Adequacy of reinsurance program Exposure to uncollectible reinsurance Adequacy of loss reserves Capital structure
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Profitability MeasuresOne & Five YearProfitability MeasuresOne & Five Year
Combined ratio Operating ratio Pre-tax income to NPE Investment yield Return on PHS Unassigned funds to assets Long term capital growth
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Reinsurance Combined Ratios WorldwideReinsurance Combined Ratios Worldwide
80
90
100
110
120
130
140
1995 1996 1997 1998 1999 2000
BER FRA GER SWTZ UK US
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US Reinsurance CompositeReturn on Equity (Surplus)US Reinsurance CompositeReturn on Equity (Surplus)
-17
-12
-7
-2
3
8
13
18
23
'83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02E
Per
cent
Fortune 500 Median U.S. P&C U.S. Reins
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Liquidity Measures Liquidity Measures
Quick liquidity Current liquidity Overall liquidity Operating cash flow High risk assets to PHS
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U.S. Reinsurance CompositeInvested Assets / LiabilitiesU.S. Reinsurance CompositeInvested Assets / Liabilities
20
40
60
80
100
120
140
160
180
200
220
'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02
Per
cen
t
Quick Current Overall
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U.S. Reinsurance CompositeNonaffiliated Invested AssetsU.S. Reinsurance CompositeNonaffiliated Invested Assets
60
70
80
90
100
110
120
130
140
'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '01
Per
cent
Inv. Assets / Liab Inv. Assets / Total Assets
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Leverage Measures Leverage Measures
Net premiums to surplus Liabilities to surplus Net leverage Reinsurance recoverables to surplus Gross leverage Capital Adequacy Ratio Financial leverage
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U.S. Reinsurance Composite Leverage U.S. Reinsurance Composite Leverage
0
50
100
150
200
250
300
350
400
450
500
'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02
Per
cent
Gross Lev Net Lev NPW
Source: AM Best
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U.S. Reinsurance CompositeRBC Composite Weighted AverageU.S. Reinsurance CompositeRBC Composite Weighted Average
449.1472.8
436 424 427
364329
278245
0
100
200
300
400
500
600
'94 '95 '96 '97 '98 '99 '00 '01 '02
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U.S. Reinsurance RBCComposite Companies - 2002U.S. Reinsurance RBCComposite Companies - 2002
02468
1012141618202224262830
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Reinsurance Market
Overview
Reinsurance Market
Overview
June 2003