Reinsurers last year reported strong growth in property and casualty (P&C) premiums driven by higher pricing and strong demand but total investment returns were “badly affected” by a decline in asset values.

Aon’s Reinsurance Aggregate report covering 19 companies shows total gross written premium rose 6% to $US343 billion ($511 billion) including a 9% increase in P&C premium to $US272 billion ($405 billion). Underwriting profit of $US8 billion ($12 billion) represented a net combined ratio of 96.2%.

The total investment return fell 61% to $US12.3 billion ($18.3 billion) and net income dropped 56% to $US9.6 billion ($14.3 billion), representing a return on equity of 5.2%.

Aon Head of Business Intelligence Mike Van Slooten says significant unrealised investment losses on bond portfolios weighed heavily on overall earnings and reported capital positions

“However, these losses are viewed as temporary and largely non-economic in nature,” he says.

“Looking ahead, renewal outcomes in 2023 and the tailwind of higher interest rates have improved the outlook for reinsurers and we expect new capital inflows to begin relieving current capacity constraints when earnings delivery is confirmed in reported results.”

The companies analysed in the report together underwrite more than 50% of the world’s life and non-life reinsurance premiums.

Included are Arch, Axis, Beazley, Everest Re, Fairfax, Hannover Re, Hiscox, Lancashire, Mapfre, Markel, Munich Re, Partner Re, QBE, Qatar Insurance, Ren Re, Scor, Swiss Re, SiriusPoint and WR Berkley.