Underwriting loss of $90Bn in 2022 for Berkshire Hathaway: Since the year 2017, this is first full year underwriting loss. Combined Ratio: GEICO 104.8, Re-insurance group 90.6, Primary group- 97.1, Total P&C Insurance 102.8, Total P&C re-insurance 90.6, Total P&C 100.
Insurance industry M&A activity was up in 2022: With total M&A of 449, the activity was up 7% from the year 2021. The highest number of M&A was in USA (52%), followed by Europe (28%), APAC (13%), and MENA (5%). The APAC region has highest growth in M&A activity which increased by 42% in comparison to year 2021.
After C-ROSS implementation, Chinese insurance industry solvency ratio declined in 2022: In the first year of implementation of China Risk-Oriented Solvency System (C-ROSS) which was aimed at strengthening insurers’ capital bases, solvency ratio of industry declined a little. The average comprehensive solvency ratios for non-life insurers was ~237% end Dec 2022 as against 283.7% at the end of 2021.For Re-insurance it was 300.1% (2022) in comparison to 311.2% (2021)
Japanese MS&AD Insurance Group Holdings might close down some of the overseas locations: According to Nikkei Asia, the goal of the group is adjusted ROE of 10% by FY2025 and an ROE of at least 6% from each overseas locations. The group may exit from less profitable market.
Re-insurance market looks buoyant on the back of investment income (higher interest rate) and hard market: However, Major CAT events and social inflation can play a spoil sport. In January 2023, re-insurance renewals has seen continuation of hard market and sharp uptick in price. Re-insurers are reporting higher renewal pricing.
Encouraging sign in CAT bond market; New entry by The Andover Companies: The issuer is Locke Tavern Re Ltd & GC Securities is sole structuring agent and bookrunner. The size of the bond is $125Mn and the perils covered are earthquake, Northeast US named storm, severe thunderstorm, & winter storm.
11 new captives in Oklahoma; 12 new captives in Guernsey in 2022: The pace of new captive formation is expected to be strong in 2023. Oklahoma, for example already issued 3 more licenses till now in 2023. While Guernsey issued 12 new captive licenses which makes it largest captive domicile in Europe.
Kuala Lumpur is hosting Asian captive conference: The conference will take place on August 24, 2023. This is a collaboration between Labuan International Insurance Association and Labuan International Business and Financial Centre.