The european reinsurance sector

• Pages: 29-33

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

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