ACORD, the standards-setting body for the global insurance industry, has announced that its Global Insurance Stock Index outperformed the broader market for the second consecutive quarter in a row, delivering a return of 28.9% compared to the worldwide average of 17.3%.
From what we understand, the growth was attributed towards a gradual decrease in inflation, as well as modest increases in global output, which is ultimately fueling optimism for continued economic growth and driving an easing monetary policy in select global economies.
ACORD noted that performance in the upcoming quarter is expected to be influenced by Atlantic-basin storms, continued geopolitical pressures, and the ability of central banks to execute a soft landing.
Focusing attention on the reinsurance sector, strong profitability was observed in the second quarter, driven by lower combined ratios and expanded, consistent investment income. One notable performance came from The Reinsurance Group of America, Incorporated (RGA), in North America, which saw a 6.9% increase quarter-over-quarter and a 51.1% increase year-over-year.
Meanwhile, Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft (Munich Re), in München, based in EMEA, reported a 7.0% increase quarter-over-quarter and a 40.9% increase year-over-year.
While Swiss Re AG (Swiss Re), also in EMEA, posted a 2.1% rise quarter-over-quarter and a 31.4% increase year-over-year
Furthermore, Hannover Rück SE (Hannover Re) in EMEA witnessed a 3.7% decline quarter-over-quarter, but managed to achieve a 25.7% increase year-over-year.
And Everest Re Group, Ltd (Everest Re), in North America, reported a 3.6% decline quarter-over-quarter, but posted a 13.5% increase year-over-year.
Moving attention now towards property and casualty (P&C), the sector experienced a variety of benefits, such as continued rate increases across all lines, combined with improving loss ratios and strong investment gains.
However, multi-line insurers underperformed due to their exposure to the Chinese market.
Additionally, life insurers saw strong sales and investment gains overshadowed by economic uncertainty in China.
Shifting attention now regionally, North America experienced strong revenue growth and higher investment yields, driving industry profits.
However, in EMEA, top-line growth and easing claims cost inflation were dampened by major catastrophe losses.
Across the Latin America (LatAm) & Caribbean region, moderate premium growth was seen amidst a sluggish economy and escalating climate related loss costs. In the Asia-Pacific region, global expansion, capital restructuring and internal investments were offset by macroeconomic uncertainty across selected markets.
Among company sizes, small organisations experienced superior share gains, mostly driven by M&A rumors and strong financial performance. Medium-sized companies reportedly benefited from capital restructuring and strong financial performance among customer/product/geographic focused carriers.
And lastly, large companies, notably those not based in China, witnessed strong results, which were fueled by strategic acquisitions, geographic expansion, and profitability improvements.
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