Swiss Re tops the list of the world’s 50 largest reinsurers as a result of its adoption of the IFRS-17 accounting standards, which also led to a shuffle among the top-tier reinsurers, according to AM Best.
Swiss Re had previously reported under the GAAP standards, but by changing to IFRS 17, it moves from first among the non-IFRS-17-reporting reinsurers in 2023 to first among IFRS-17 reporters in 2024.
Munich Re has now moved from the top spot among IFRS-17 reporters to second place, followed by Hannover Re at third place, said AM Best’s market segment report titled “.”
(In 2023, Swiss Re topped the list of non-IFRS-17 reporting reinsurers while Munich Re topped the list of IFRS-17 reporting reinsurers, according to AM Best in its 2023 report on the 50 largest reinsurers, published in August 2024).
Swiss Re reported US$40.5 billion of gross premiums written (GPW) at year-end 2023 and US$36.2 billion of reinsurance revenue at year-end 2024, (which are the different accounting categories under non-IFRS reporting and IFRS reporting, respectively).
In terms of underwriting performance, Munich Re led with a non-life reinsurance combined ratio of 77.3, compared to 85.2 for the year prior. (A combined ratio below 100 indicates an underwriting profit).
Swiss Re had a combined ratio of 89.9 at year-end 2024, while Hannover Re and SCOR both had combined ratios of 86.6. (Editor’s note: The net combined ratios presented in the rankings under IFRS 17 and non-IFRS 17 are not directly comparable and are generally lower under IFRS 17, AM Best explained).
Non-IFRS Reporting Reinsurers
Among the top five non-IFRS-17 players, the most significant change in ranking was seen from Berkshire Hathaway, which moved into the top position in 2024, with US$26.9 billion of GPW, followed by Lloyd’s at second place with US$23.5 billion, AM Best added.
The remaining top-five non-IFRS 17 players are Reinsurance Group of America (RGA) at number three with GPW of US$15.6 billion; Everest Group (which moved up from sixth place in 2023 to fourth in 2024) with GPW of US$12.9 billion; and Renaissance Re (RenRe) at number five with $11.7 billion GPW, AM Best said.
GPW among the top five non-IFRS 17 companies grew 3.5%, from US$87.6 billion to US$90.7 billion, said AM Best, noting that growth of 8.9% among Lloyd’s, RGA, and Everest was offset by a decline of 2.9% for Berkshire Hathaway and Ren Re.
The underwriting performance of the top five non-IFRS 17 companies was also solid, said the report, with an average weighted non-life undiscounted combined ratio of 85.7.
AM Best explained that Everest’s rise by two places in the rankings was due to a 12.9% increase in GPW. “This growth was driven by the expansion of property lines in the year and rate improvement on casualty lines,” said the report, noting that Everest’s move ahead of RenRe comes one year after it had displaced Everest among the top 10 reinsurers (partly due to the impact of RenRe’s acquisition of Validus Re in November 2023).
The report attributed RenRe’s drop in the rankings to the fact that its third-party premiums contracted 4.9% year-over-year. “Though the premiums eligible for consideration under our methodology contracted year-over-year, RenRe’s group level gross premiums rose 32.4% over the same period,” AM Best said.
Few New Entrants
AM Best said that new reinsurer entrants “are notably absent from the lower rankings.”
“In a generationally hard reinsurance market, there hasn’t been a significant number of new company formations to capitalize on the underwriting opportunities available,” the report affirmed.
However, investment activity in the reinsurance market has not disappeared, as 144A catastrophe bond issuance has been record-breaking, said AM Best. “Given relatively high risk adjusted spreads, well-defined short-duration risks, and remoteness of attachment points, cat bonds remain attractive to ILS investors.”
Outlook for 2025
As for the outlook for 2025, AM Best said, global reinsurers’ results for 2025 will depend upon activity during the Atlantic hurricane season, which is expected to produce an
The California wildfires in January hit results for the first quarter, with many reinsurers with California exposure reporting their worst quarterly underwriting experience in recent years, while the wildfires eroded substantial portions of their catastrophe budgets for the year.
Nevertheless, the market has witnessed pockets of rate softening during the mid-year renewals.
“Notably, the April 1st renewals saw double-digit rate softening for catastrophe excess-of-loss covers in the Japanese reinsurance market,” said the report, noting that some firms may choose to return this excess capital to shareholders rather than deploy it at inadequate rates in the coming years.
“Improved casualty pricing and loss equilibrium could entice players that have been sitting on the sidelines to deploy their capital there, as the favorable stock multiples and increased diversification could positively impact performance and bolster shareholder returns.”
However, AM Best cautioned that casualty markets continue to be a concern, “as social inflation continues to burden the U.S. market.”
IFRS-17 Versus Non-IFRS Reporting
IFRS 17 officially came into effect on January 1, 2023, marking a fundamental shift in insurance accounting.
In response, AM Best explained that last year’s top-50 reinsurers report introduced two separate rankings based on GPW for non-IFRS-17-reporting reinsurers and reinsurance revenue for IFRS-17-reporting companies.
The AM Best analysis has evolved “to provide the most relevant rankings possible, as comparison between the two standards was not deemed appropriate.”
“The new standard aims to enhance transparency, consistency and economic relevance in financial reporting,” AM Best continued. “By aligning profit recognition with the delivery of insurance services, IFRS 17 provides a more economically meaningful and transparent view of profitability.”
Under IFRS 4, GPW served as the primary top-line metric 鈥� but under IFRS 17, “农夫导航 Service Revenue (ISR)” has become the new top-line measure, AM Best explained.
“These two metrics are not directly comparable for ranking purposes, as they reflect fundamentally different accounting models, shifting from a cash-based to a service-based accounting.” AM Best noted that the difference is particularly pronounced for reinsurers.
While ISR is conceptually closer to gross earned premiums, it is net of some ceding commissions that are not classified as insurance revenue under IFRS 17, the report said. “Additional differences arise from adjustments for financing effects, among other factors. To address these comparability challenges, AM Best has introduced two separate rankings 鈥� one based on IFRS 17 and another on non-IFRS 17 metrics.”
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