March 18, 2005 by Canadian Underwriter
Reinsurers operating in the U.S. likely finished last year with deteriorating business indicators with companies reporting declines in premium volume while higher claims costs appear to have boosted the sector’s combined ratio, according to data released by the Reinsurance Association of America (RAA). Although U.S. reinsurers were able to increase policyholder surplus during 2004 by 9.5% to US$61.2 billion, companies only produced net written premiums of US$28.7 billion over the period, reflecting a 6% drop on the US$27 billion reported for 2003.
The RAA data also suggests that over 2004 U.S. reinsurers saw a five percentage point rise in the combined ratio to 106.2% compared with the 101.2% ratio disclosed the year before. The sector’s 2004 returns show a loss ratio of 79.8% and an expense ratio of 26.4%.