Nat Cat impact 18 percent lower in 2017

In a new combined ratio analysis, Willis Re compared 2017 with the severe catastrophe-affected years of 2005 and 2011. The analysis of a subset of reinsurers shows that the reported combined ratio for 2017 was 107.4 percent compared with 108.2 percent in 2011 and 112.8 percent in 2005. The impact of natural catastrophe losses in 2017 was 18.1 percent lower than 2011 (24.8 percent) and 2005 (25.8 percent).

Notably, excluding natural catastrophe losses and prior year reserve releases, the Ex-Cat Accident Year combined ratio deteriorated further to 94.6 percent in 2017, from 90.2 percent in 2011 and 89.2 percent in 2005.

James Kent, Global CEO, Willis Re, said: “2017 was one of the worst years on record for insured natural catastrophe losses. However, today the global reinsurance market is able to deploy more capital than at the same time last year. When a few exceptional transactions are considered, total reinsurance capacity is roughly stable, despite the hurricanes, earthquakes, wildfires, and other events which brought misery to millions of people in 2017. That’s a significant achievement for the reinsurance market, and a testament to its strength.”

“The pressure on traditional reinsurers from alternative capital suppliers is stronger than ever, as many participants in this market cleared their first true major test. This increase in alternative capital, as well as the global reinsurance market having more capital to deploy, is continuing to dampen price increases in the mid-year renewals,” he added.