The european reinsurance sector

• Pages: 29-33

3. THE EUROPEAN REINSUR ANCE SECTOR

Dspite arelatively benign st art of the year, 2018 ended

up the fo urth 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 co nsiderably

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 losse s (Harvey, Irma and

Maria), and the consid erable insured lo sses in 2018, the

renewals in 2018 as well as in January 2019 had only mod-

erate pr ice increases, mos tly in the regio ns and lines of

business aected by the catastr ophe event s. The alter-

native market has co ntinued to show stro ng appetite for

insurance risks leading t o a considerable capital supply

in the reinsurance market. Are-str engthening of the so ft

market is ther efore not unlikely amid high competitive

pressures. Moreover, the ability to release reserve from

previous year s appears to have been diminished amid

24 NatCatSERVICE: Natural catastr ophe 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 p oints from 2017Q4 . This

trend can also be obser ved when sep arating 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 le gal expenses ( 7%). For non-pro portional,

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

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