Moody’s: Reinsurers’ Q1 Results Weak
Moody’s reports that reinsurers’ first quarter 2020 results were predictably weak, with aggregate net income plummeting to $79 million compared with $7.8 billion in the prior year period. Even as reinsurers were able to garner significant, long-needed price increases in property for the first quarter, the price increases were not enough to offset the tide of multimillion-dollar losses wrought by claims due to COVID-19.
Those losses drove the sector’s combined ratio up by nearly nine points to 102.7 percent from 94 percent in the prior-year period, and the sector now faces an active Atlantic hurricane season. Moody’s cautions that from a capital perspective, reinsurers’ profitability will come down to the severity and duration of the economic downturn, the severity of this year’s hurricane season, and low interest rates. In the United States, property catastrophe accounts saw 10 percent to 30 percent rate increases.