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Aug 22 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings says reinsurers' solid underwriting gains in H113 were offset by increased unrealised investment losses, according to a newly-published report.
The global reinsurers that Fitch rates improved their underwriting combined ratio to 85.9% in H113, compared with 87.7% in H112, as catastrophe-related losses were manageable and loss reserve development remained favourable.
The global reinsurance industry experienced below-average natural catastrophe losses of USD13bn in H113, below the 10-year average of USD22bn. The majority of losses were from flooding in Europe, Canada and Australia, and severe thunderstorms in the US.
Solid underwriting profitability was offset by increased unrealised investment losses on fixed maturities, resulting in shareholders' equity growth of only 1.3% for non-life reinsurers during H113. Underwriting opportunities remained somewhat limited, resulting in only marginal growth in premiums written.
Several individual reinsurance product lines continued to experience unfavourable reserve development during H113, primarily longer-tail casualty and liability lines.
However, earnings continue to be supported by surpluses from prior-year reserves. Reserve releases were equivalent to 6.4% of earned premiums in H112, against 6.6% at end-2012.
The report, entitled "Global Reinsurers' Mid-Year 2013 Financial Results" is available on www.fitchratings.com or by clicking the link below.
Link to Fitch Ratings' Report: Global Reinsurers' Mid-Year 2013 Financial Results