The european reinsurance sector

Pages29-33
3. THE EUROPEAN REINSURANCE SECTOR
Dspite arelatively benign st art of the year, 2018 ended
up the fourth costliest year ever in terms of insured ca-
tastro phe losse s. Total global catastroph e losses am ount-
ed to around USD 160 bn in 2018 , with half of the losse s
insured (USD 80 bn).24 While losses were considerably
lower compar ed to the extreme global catastrophe losses
of 2017, which totalled USD 350 bn (of which USD 140 bn
insured), tot al insured losses in 2018 we re still considera-
bly above the 10-year average and 30-average of USD 61
bn and USD 41 bn, r espectively.
Despite t he huge insured losses in 2017, which were driv-
en mainly by record hurricane losses (Harvey, Irma and
Maria), and the considerable insured losses in 2018, the
renewals in 2018 as well as in January 2019 had only mod-
erate price increases, mostly in the regions and lines of
business aected by the catastrophe events. The alter-
native market has co ntinued to show stro ng appetite for
insurance risks leading to aconsiderable capital supply
in the reinsurance market. Are-str engthening of the so ft
market is therefore not unlikely amid high competitive
pressures. Moreover, the ability to release reserve from
previous years appears to have been diminished amid
24NatCatSERVICE: Natural catastrophe review 2018, MunichRE and
sigma SwissRe est imates.
lower solve ncy positions. Against this background set ting
risk-adequate prices at the upcoming renewals is crucial
for re insurance under takings.
3.1. MARKET SHARE AND
GROWTH
The overall share of reinsurance GWP in total GWP
increased across EEA countries. Total reinsurance GWP
amounted to EUR 214 bn, appr oximately 15% of to tal GWP,
an increase of 2 percentage points from 2017Q4. This
trend can also be observed when separating total GWP
for non-pro portional (which increase d from EUR 25 bn to
EUR 27 bn) and pro portional (EUR 89 bn to EUR 92 bn) in
the same p eriod. The propor tional LoB that had the high-
est increase compared to 2017 Q4 was other motor (33%)
followed by legal expenses (7%). For non-proportional,
casualty was the line LoB with the biggest increase (23%),
followed by p ropert y (5%), while health had adecrease of
18% (Figures 3.1 and 3.2).
Figure 3.1: Gross Written Premiums for prop ortional reinsurance by Line of Business
0
5
10
15
20
25
30
35
Assistance
Fire & other damage
to property
General liability
Income protection
Legal expenses
Marine, aviation and
transport
Medical expense
Miscellaneous
f‌inancial loss
Credit and suretyship
Motor vehicle liability
Other motor
Workers’
compensation
Billions
2017Q4 2018Q4
Source: EIO PA Quarterl y Solo
Reference date: Q4 201 8
NANCIAL STABILITY REPORT
29

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