Reinsurer and insurer combined operating ratios improved in the first half as rate increases outstripped claims trends, Willis Re says in a report on results reported by global firms.

Double digit premium increases were reported by six of the 18 companies tracked, with QBE leading the way with a 26% increase as rising commodity prices contributed to substantial growth in its North America crop business.

Overall, pricing in commercial lines fuelled premium growth, while rate increases for reinsurance and in retail also supported the momentum.

Willis Re says favourable pricing is expected to continue into next year, although some management teams have cautioned that rate increases are likely to be less significant, and have started to ease in parts of their portfolios.

Profitability improvements were also supported by lower-than-normal personal lines loss frequency and some reserve releases, and were achieved despite higher-than-average natural catastrophe losses.

The average combined ratio for the half was 93.7%, with every company below 100%, in a much- improved performance compared to the year-earlier period, which included significant COVID losses.

Willis Re says concerns weighing on the outlook are the deceleration of the rating environment and the longevity of the current cyclical upswing, and whether inflation will continue to increase.

Inflation impacts potentially include loss ratio deterioration, given lags in pricing responses, loss development increases above booked levels and reductions in the asset value of bond portfolios, the report says.

“In the current pricing cycle, companies appear to be proactively taking pricing action, but it remains to be seen whether it is sufficient,” it says.

Companies included in the report are QBE, Chubb, AIG, Aviva, MS&AD, Liberty Mutual, Allianz, Axa, Zurich, Travelers, Mapfre, Hannover Re, Swiss Re, Munich Re, Generali, Sompo, Tokio Marine and Scor.