General Insurance Article - Willis Reinsurance Index increases to $338.3bn

 Net income for the Index remained robust at $14.5 billion2 and was offset by $10.6 billion of share buybacks and dividends. The figures suggest that while conditions continue to be difficult, reinsurers remain focused on maintaining their financial stability.

 Reinsurers are under continued pressure from market pricing weakness that, when exacerbated by natural catastrophes losses3, (H1 2016 increased to US$31 billion from $21 billion H1 2015 according to Swiss Re Sigma figures) led to an upswing in the combined ratio for the Index.

 The report highlights that ongoing market pressures are manifesting themselves in a diminishing underlying Return on Equity (RoE), the full effect of which continues to be minimised by prior year reserve releases; for the Subset of the Index4, this underlying RoE reduced from 4.9% in H1 2015 to 4.5% in H1 2016.

 Commenting on the report, John Cavanagh, Global CEO of Willis Re, said: “There is no doubt that market conditions remain challenging for reinsurers. As the latest Willis Reinsurance Market Report highlights, the industry’s return on equity continues to be flattered by strong support from prior year reserve releases. Despite this, the balance sheet strength of the market remains robust; reinsurers with significant balance sheet scale and breadth, and those which have reserved prudently will be best positioned to maintain profitability.”

 The Willis Re Reinsurance Market Report is a biannual publication providing in-depth analysis of the size and performance of the reinsurance market. Analysis is based on the Willis Reinsurance Index group of companies. In 2016 The Index includes 37 companies from across the globe.