2017 Reinsurance Market Briefing - Zurich - A. M. Best · No part of this presentation amounts to sales / marketing activity and A.M. Best’s Rating ... 2017 Reinsurance Market Briefing

2017 Reinsurance Market Briefing - Zurich

FIFA Museum AG

7 June 2017


Reinsurance Market Briefing - Zurich 7 June 2017 2

Welcome

Nick Charteris-Black Managing Director, Market Development – EMEA

Agenda


10:10 Keynote Speech: ILS Market Update & Developments

Niklaus Hilti, CEO of Credit Suisse Insurance Linked Securities Ltd

10:50 Thematic Session:

Global Reinsurance Outlook Greg Reisner, Director

11:20

11:40 Methodology Update Presentation: An Update on A.M. Best's Credit Rating Methodology (BCRM) for (Re)Insurance Companies & Best's Capital Adequacy Ratio (BCAR) Model

Greg Carter, Managing Director, Analytics – EMEA Mathilde Jakobsen, Director, Analytics

12:20 Reinsurance Buying Trends: Analysis of Reinsurance Purchasing Trends Within Europe's Major Cedant Groups & Leading National Insurers

Catherine Thomas, Senior Director, Analytics

13:00

Disclaimer


© AM Best Company (AMB) and/or its licensors and affiliates. All rights reserved. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT AMB’s PRIOR WRITTEN CONSENT. All information contained herein is obtained by AMB from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. Under no circumstances shall AMB have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of AMB or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if AMB is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The credit ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities, insurance policies, contracts or any other financial obligations, nor does it address the suitability of any particular financial obligation for a specific purpose or purchaser. Credit risk is the risk that an entity may not meet its contractual, financial obligations as they come due. Credit ratings do not address any other risk, including but not limited to, liquidity risk, market value risk or price volatility of rated securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY AMB IN ANY FORM OR MANNER WHATSOEVER. Each credit rating or other opinion must be weighed solely as one factor in any investment or purchasing decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security or other financial obligation and of each issuer and guarantor of, and each provider of credit support for, each security or other financial obligation that it may consider purchasing, holding or selling.

Disclaimer


US Securities Laws explicitly prohibit the issuance or maintenance of a credit rating where a person involved in the sales or marketing of a product or service of the CRA also participates in determining or monitoring the credit rating, or developing or approving procedures or methodologies used for determining the credit rating.

No part of this presentation amounts to sales / marketing activity and A.M. Best’s Rating Division employees are prohibited from participating in commercial discussions.

Any queries of a commercial nature should be directed to A.M. Best’s Market Development function.



Thematic Session: Global Reinsurance Outlook

Greg Reisner Director

P/C Reinsurance


Market is still largely influenced by global leaders

M&A will continue

Alternative capacity is

driving change

Alternative capital is driving a great deal of structural change in the market.

However, the market continues to be heavily influenced by the global reinsurance leaders.

P/C Reinsurance


292 320 340 332 345

19 48

60 68 75

0

50

100

150

200

250

300

350

400

450

2012 2013 2014 2015 2016E

ConvergenceCapacity

TraditionalCapacity

Total Dedicated Reinsurance Capacity (USD billions)

Note: * Estimate by Guy Carpenter and A.M. Best Source: A.M. Best, Guy Carpenter

P/C Reinsurance


4.0 3.0 4.0 4.5 25.0 34.0 41.0 48.5 19.0

23.0 23.0

22.0

01020304050607080

2013 2014 2015 2016E

US

D ($

Bill

ions

)

Alternative Capacity by Market Segment

ILW Collateralized Re Catastrophe BondsForecast by Guy Carpenter and A.M. Best

P/C Reinsurance


60%

65%

70%

75%

80%

85%

$0

$50

$100

$150

$200

$250

2012 2013 2014 2015 2016E

Capacity Utilization

Capacity Depletion Needed To Trigger a Hard Market Capacity Utilization

USD

Bill

ions

P/C Reinsurance


Vast majority of collateralized reinsurance is influenced by the Top 5 players

(USD billions)

$9.3 • Nephila Capital

$7.4 • Credit Suisse Ins Linked Strategy

$6.5 • LGT ILS Partners

$5.1 • Stone Ridge Asset Management

$4.8 • Fermat Capital Management Source: Artemis

P/C Reinsurance


Client Agent & Broker

Primary Insurance Company

Reinsurance Broker

Reinsurance Company

Convergence Capital

The market will continue to become more efficient as all

players strive to become closer to

the client.

P/C Reinsurance


Strategy Evolution

Traditional Dual Platform

Control the client

Build primary business

Alternative Capital

Platform

Manage or have a relationship

with alternative capital

Build fee income stream

M&A

Relevance and size

Ability to be small and nimble

with parental protection

P/C Reinsurance


77.3% 60.2% 56.0% 56.2% 56.2% 60.6% 57.8%

31.5%

31.6% 31.9% 33.5% 34.8% 34.7% 33.3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0%

20%

40%

60%

80%

100%

120%

2011 2012 2013 2014 2015 2016 5yr Avg

Global Market Trends Loss Ratio Expense Ratio Loss Reserve Development

P/C Reinsurance


107%

91% 89% 92% 92% 96%

112%

93% 87% 87% 91% 92%

108%

91% 87% 88% 90%

98%

0%

20%

40%

60%

80%

100%

120%

2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016

European "Big Four" U.S. & Bermuda Lloyd's

Combined Ratios by Reinsurance Sector Loss Ratio Expense Ratio

P/C Reinsurance


1.9%

12.4% 13.1%

11.6%

9.5% 8.2%

0%

2%

4%

6%

8%

10%

12%

14%

2011 2012 2013 2014 2015 2016

Global Market Trends ROE 5yr Avg

P/C Reinsurance


6.6%

-0.9% -2.8%

13.0%

10.6%

15.1% 13.1%

11.6%

16.2%

11.0% 10.9%

14.7%

11.5%

7.5% 8.9%

9.7%

6.8% 8.1%

-5%

0%

5%

10%

15%

20%


Return on Equity by Reinsurance Sector

2011 2012 2013 2014 2015 2016

P/C Reinsurance


13.8% 15.0%

10.0%

13.3% 12.4% 12.4%

0%

2%

4%

6%

8%

10%

12%

14%

16%

2011 2012 2013 2014 2015 2016

Global Market Trends Operating Cash Flow as a % of Equity

P/C Reinsurance


18.4%

9.8% 11.9%

19.2%

10.9%

13.2% 11.4% 10.6%

5.4%

17.9%

11.4%

6.0%

17.1%

9.7%

7.2%

15.4%

9.9% 10.9%

0%

5%

10%

15%

20%

25%


Operating Cash Flow as a Percentage of Equity by Reinsurance Sector

2011 2012 2013 2014 2015 2016 Q4

P/C Reinsurance


Composite includes Greenlight Re, Third Point Re, Watford Re, Hamilton Re.

Hedge Fund Reinsurance Strategies 5-Yr Avg 2016 2015 2014 2013 2012 2011 NPW (P&C only) 1.2 1.8 1.9 1.3 0.5 0.5 0.4 Net Earned Premiums (P&C only) 1.0 1.5 1.7 1.0 0.5 0.5 0.4 Net Investment Income 0.3 0.4 0.2 0.7 0.2 0.1 0.0 Realized Investment Gains / (Losses) - - - - - - - Total Revenue 1.3 1.9 1.8 1.6 0.8 0.5 0.4

Net Income 0.1 0.1 (0.3) 0.3 0.3 0.0 0.0 Shareholders' Equity (End of Period) 3.8 6.1 6.0 5.0 1.1 0.8 0.8 Loss Ratio 67.9% 69.1% 66.0% 64.1% 61.8% 78.5% 63.6% Expense Ratio 37.8% 42.0% 36.4% 40.8% 35.3% 34.3% 40.2% Combined Ratio 105.7% 111.2% 102.4% 104.9% 97.1% 112.9% 103.8% Reserve Development - (Favorable)/Unfavorable 3.4% 2.9% 1.8% 0.8% -0.7% 12.2% 6.9% Net Investment Ratio1 31.9% 27.3% 10.4% 65.3% 39.8% 16.9% 6.1% Operating Ratio 73.7% 83.9% 92.0% 39.6% 57.3% 96.0% 97.7% Return on Equity 6.5% 1.5% -4.8% 6.6% 27.3% 1.8% 0.8% Return on Revenue 8.9% 4.6% -15.8% 19.5% 33.4% 2.7% 1.7% NPW (P&C only) to Equity (End of Period) 39% 30% 33% 25% 51% 55% 44% Net Reserves to Equity (End of Period) 23% 20% 20% 8% 30% 39% 26% Gross Reserves to Equity (End of Period) 27% 22% 22% 15% 31% 43% 30%

Segment Outlook – Reinsurance


Headwinds Tailwinds Intense competition Cession rates increasing Ongoing interest from third party capital Solid calendar year underwriting results

Earnings under pressure Favorable reserve development Pressure on terms and conditions Strong risk-adjusted capital

Potential for increased inflation Increase in interest rates M&A

Although performance and capitalization remain strong, pressure on margins continues to mount. Over the intermediate term, returns for some reinsurers will

fall short on a risk-adjusted basis. Maintain negative outlook.


Q&A Greg Reisner

Director



Methodology Update Presentation: An Update on A.M. Best's Credit Rating Methodology

(BCRM) for (Re)Insurance Companies & Best's Capital Adequacy Ratio (BCAR) Model

Greg Carter Managing Director, Analytics - EMEA

Mathilde Jakobsen Director, Analytics

Agenda


Update on proposed changes to Best Credit Rating Methodology (BCRM) Update on proposed changes to Best Capital Adequacy Ratio (BCAR) model

A.M. Best Rating Methodology – Key Rating Components


Balance Sheet Strength

Operating Performance

Business Profile

Enterprise Risk Management

+ Country Risk

Rating

Insurance Company Financial Strength

Best's Credit Rating Methodology (BCRM)


All information can be found at www.ambest.com

Best's Insurance-Linked Securities & Structures Methodology (BILSM)


All information can be found at www.ambest.com

Methodology Update

Reinsurance Market Briefing - Zurich 7 June 2017

• Impetus for change

– Transparency and consistency

– Move towards best practices

– A way to integrate new tool: application of BCAR

• Methodology still subject to changes

• No fundamental change to rating analysis

28

Timeline


29

Draft BCRM & PC BCAR

criteria released for comment

Comment period included public updates

as specific issues raised

Comment period extended to coincide with

release of all BCAR models

Comment period ends

Comments incorporated as necessary into BCRM and all BCAR criteria

BCRM and BCAR criteria is published and

becomes effective

10-MAR-2016

Q3/4 2017

1-MAR-2017

Building Block Approach


• The building blocks themselves will remain the same • Components of the building blocks are currently reviewed

A.M. Best’s Rating Process

30

Stochastic-Based BCAR


• Best’s Capital Adequacy Ratio (BCAR) – Comprehensive quantitative tool that evaluates many of the risks to the

balance sheet simultaneously – Generates an overall estimate of the required level of capital to support

those risks and compares it with available capital

• BCAR is a key tool in the assessment of balance sheet strength – Not the sole determinant of balance sheet strength – Not the sole determinant of the rating

31



• Not intended to change underlying view of the risks • Not intended to change the main risk categories of the models

Goals are to:

− Apply stochastic-based risk factors within the model, with factors generated using stochastic simulations from probability curves and ESG

− Incorporate company-specific detailed data from A.M. Best’s Supplemental Rating Questionnaire and financial statements



• New Metric – VaR (Value at Risk)

33

VaR does not tell us about what’s in the tail so we need to look at more than one VaR



• Using Value at Risk (VaR) metric – VaR levels: 95, 99, 99.5, 99.6 – VaR 99.8 also modelled but not included in balance sheet assessment

34

Return Period (Years)

Annual Probability (%)

ConfidenceLevel (%)

20 5.0 95.0100 1.0 99.0200 0.5 99.5250 0.4 99.6



• The BCAR formula itself is changing

BCAR = ( Available Capital - Net Required Capital) x 100Available Capital



Available Capital (AC) Reported Capital (PHS) Equity Adjustments:

Unearned Premiums (DAC) Assets Loss Reserves Reinsurance Equalization/Contingency Reserves

Debt Adjustments: Subordinated Debt Debt Service Requirements

Other Adjustments: Goodwill & Intangible Assets Other

Net Required Capital Gross Required Capital (GRC): (B1) Fixed Income Securities (B2) Equity Securities (B3) Interest Rate (B4) Credit (B5) Loss and LAE Reserves (B6) Net Premiums Written (B7) Business Risk (B8) Potential Catastrophe Loss

Covariance Adjustment

Net Required Capital (NRC)*

BCAR Ratio = (Available Capital – Net Required Capital) / Available Capital x 100

*NRC= SQRT [ (B1)²+(B2)²+(B3)²+(0.5*B4)² +[(0.5*B4)+B5)]²+(B6)² + (B8)²] + B7



• Catastrophe risk as a separate NRC component (B8) – Net PMLs (pre-tax)

• All perils combined per occurrence – Included in covariance adjustment

• More diversification benefit (usually) so lower NRC

Net Required Capital = + (B7)(B1)2 + (B2)2 + (B3)2 + (.5 * B4)2 + [(.5 * B4) + (B5)]2 + (B6)2 + (B8)2





• If a cat loss occurs, what would the BCAR scores look like? – Reduce Available Capital (Reported Surplus)

• 1-in-100 year pre-tax Net PML from per occurrence, total all perils • Including reinstatement premium

– Increase recoverables by 40% of ceded loss • From 1-in-100 year pre-tax PML from per occurrence, total all perils • Adjust credit risk factors if needed

– Increase net loss reserves by 40% of pre-tax net PML • From 1-in-100 year pre-tax PML from per occurrence, total all perils

– See magnitude of BCAR scores drop at all confidence levels

BCAR in the Rating Process


• BCAR is the starting point assessment for balance sheet strength

BCAR in the Rating Process


• BCAR is the starting point in the assessment of balance sheet strength

Balance Sheet Strength Assessment


42

Holding Company Impact Assessment


Country Risk Balance

Sheet Strength

Baseline

Rating Unit Balance Sheet

Strength Assessment

Consolidated BCAR Financial Leverage

Operating Leverage Coverage

Financial Flexibility/Liquidity Intangible Assets

Holding Company Impact

Assessment

43

Balance Sheet Strength Assessment


Combined Balance Sheet Strength Assessment (Lead Rating Unit and Holding Company)

Holding Company

Lead

Rat

ing

Uni

t Positive Neutral Negative Very Negative

Strongest Strongest Strongest Very Strong Adequate Very Strong Strongest Very Strong Strong Weak

Strong Very Strong Strong Adequate Very Weak Adequate Strong Adequate Weak Very Weak

Weak Adequate Weak Very Weak Very Weak Very Weak Weak Very Weak Very Weak Very Weak

44

The Baseline Assessment


Overall Balance Sheet Strength Assessment

Com

bine

d Ba

lanc

e Sh

eet A

sses

smen

t (R

atin

g U

nit /

Hol

ding

Com

pany

) Country Risk Tier CRT-1 CRT-2 CRT-3 CRT-4 CRT-5

Strongest a+/a a+/a a/a- a-/bbb+ bbb+/bbb

Very Strong a/a- a/a- a-/bbb+ bbb+/bbb bbb/bbb-

Strong a-/bbb+ a-/bbb+ bbb+/bbb/bbb- bbb/bbb-/bb+ bbb-/bb+/bb

Adequate bbb+/bbb/bbb- bbb+/bbb/bbb- bbb-/bb+/bb bb+/bb/bb- bb-/b+/b

Weak bb+/bb/bb- bb+/bb/bb- bb-/b+/b b+/b/b- b/b-/ccc+

Very Weak b+ and below b+ and below b- and below ccc+ and below ccc and below

45

Baseline Adjusted for Performance


• Variety of quantitative and qualitative measures to evaluate operating performance • Using appropriate benchmark • Looking at level, trend and volatility

46

Operating Performance Rating Drivers

Underwriting performance Investment performance

Total operating earnings Prospective financial forecasts

Other considerations Unique to LOB, region of operation, structure

Operating Performance Assessment

Adjustment (Notches)

Very Strong +2

Strong +1

Adequate 0

Weak -1

Very Weak -2/3

Baseline Adjusted for Business Profile


• The factors that influences our view of business profile have not materially changed • Eight main key rating factors qualitatively judged to be positive, neutral or negative • Other metrics may be included if deemed relevant by the analyst

47

Business Profile Rating Drivers

Product/Geographic Concentration

Product Risk

Market Position Degree of Competition

Pricing Sophistication & Data Quality

Management Quality

Regulatory, Event & Market Risks

Distribution Channels

Business Profile Assessment

Adjustment (Notches)

Very Favorable +2

Favorable +1

Neutral 0

Limited -1

Very Limited -2

Baseline Adjusted for Enterprise Risk Management (ERM)


• Assessment of the overall risk management framework in place • Assessment of the rating unit’s risk profile relative to its risk management capabilities • Overall assessment of ERM

48

ERM Rating Drivers

Product and Underwriting Risk Investment Risk

Reserving risk Legislative/Regulatory/Judicial/

Economic Risk

Concentration Risk Operational Risk

Reinsurance Risk Liquidity and Capital

Management Risk

ERM Assessment Adjustment (Notches)

Very Strong +1

Adequate 0

Weak -1/2

Very Weak -3/4

Building Block Approach


• The building blocks themselves will remain the same • Components of the building blocks are currently reviewed

A.M. Best’s Rating Process

49


Q&A Greg Carter

Managing Director, Analytics - EMEA

Mathilde Jakobsen Director, Analytics



Catherine Thomas Senior Director, Analytics

Reinsurance Buying Trends: Analysis of Reinsurance Purchasing Trends

Within Europe's Major Cedant Groups & Leading National Insurers

Reinsurance Cessions: Trends in Europe


-8.2% -4.3%

17.8%

3.0% 0.3% -0.7%

6.6%

2.6%

-10%

-5%

0%

5%

10%

15%

20%

2013 2014 2015 2016

Reinsuranceceded

GrossPremiumsWritten

Note: 2016 change excludes Covea

Annual Change (%) for Top 20 European Cedants

Reinsurance Cessions in Europe 2012 - 2014


Cessions decreasing

Gross Premiums Written relatively stable

Retention ratios increasing

Optimisation of global reinsurance programmes

Group programmes, separate divisions and even new legal entities

Centralised enterprise risk management practices

Reinsurance Cessions in Europe 2014 - 2016


Cessions increasing, most notably in 2015

Gross Premiums Written modest increase

Retention ratios decreasing

Opportunistic reinsurance purchasing – favourable terms

Maintaining client relationships without breaching profitability hurdles

Focus on capital efficiency

Supporting new lines of business

Notes: Ranked by 2016 premiums ceded. Source: Best's Statement File -- Global, A.M. Best data and research

Reinsurance Cessions: Trends in Europe


Reinsurance Ceded (Non-Life) (EUR millions)

Gross Premiums Written (Non-Life) (EUR millions)

Company Name (Top 10) Country 2016 2015 2014 2016 2015 2014

Lloyd's of London United Kingdom 7,936 7,690 6,713 34,870 36,218 32,281

Zurich Insurance Group Switzerland 6,657 5,157 4,503 32,944 33,102 32,711

Chubb Switzerland 6,490 5,581 4,503 31,188 21,794 17,491

Allianz Germany 4,397 4,933 3,961 51,535 51,597 48,322

MAPFRE Spain 3,404 3,442 2,599 17,700 17,441 16,370

AXA France 3,346 3,224 2,907 35,900 34,931 32,872

Talanx Germany 2,931 2,885 2,500 19,096 18,883 16,438

Munich Reinsurance Company Germany 1,280 1,161 1,021 24,684 24,789 23,654

RSA Insurance Group United Kingdom 1,146 1,229 1,268 8,431 9,306 9,326

Admiral Group United Kingdom 1,032 963 824 1,731 1,628 1,408

Total (Top 20) 44,519 43,239 36,599 318,974 310,960 291,395

Retention ratios: Company-specific factors


Retention Ratios (%)

Company Name 2016 2015 2014

Assicurazioni Generali 95 95 94 Munich Reinsurance Company 95 95 96 UnipolSai Assicurazioni 94 94 95 Aviva 93 84 93 Allianz 91 90 92 AXA 91 91 91 SCOR 90 89 90 Groupama 88 88 89 RSA Insurance Group 86 87 86 Talanx 85 85 85 Notes: Excludes Covea - 2016 data not available Source: Best's Statement File -- Global, A.M. Best data and research

Responding to Reinsurance Market Trends


Dedicated reinsurance capacity continues to grow

Results helped by reserve releases and benign cat experience

Risk-adjusted capitalisation remains strong

But, margins and ROEs under pressure - reinsurance rate decreases unsustainable

A.M. Best outlook on the reinsurance sector negative

Reinsurance Cessions in Europe 2017 and beyond


Reinforcing or broadening product range in commercial and specialty lines

National champions accommodating needs of corporate multinationals

New lines of business – technical and capital support

Potential impact of acquisitions

Capital Management / ERM


Centralised ERM frameworks

Reduction in SCR volatility

Reinsurance as efficient capital support

Highly rated reinsurers remain well capitalised

Top Cedants: Germany




Company Name (Top 10) 2015 2014 2015 2014

Allianz SE 4,933 3,961 51,597 48,322

HDI Versicherung a.G. 3,065 2,718 13,633 11,934

Munich Reinsurance Company 1,161 1,021 24,789 23,654

Deutsche Rückversicherung AG 410 403 1,077 1,038

SV SparkassenVersicherung Holding AG 397 402 1,504 1,448

Gothaer Versicherungsbank VVaG 348 339 2,151 2,083

Provinzial Rheinland Holding Sparkassen 294 275 1,395 1,328

Provinzial NordWest Holding AG 255 267 1,827 1,787

Versicherungskammer Bayern Versicherungs 234 227 2,399 2,231

HUK-COBURG Haftpflicht-Unterstützungs 228 226 4,463 4,209

Total (Top 20) 12,774 11,292 121,896 114,224

Growth (Top 20) 13.1% 6.7%

Notes: For the full Top 20 listing, please see A.M. Best’s Briefing, “Natural Catastrophe Exposures Underpin Stable German Reinsurance Buying Trends” Source: Best's Statement File -- Global, A.M. Best data and research

Top Cedants: Germany


Notes: For the full Top 20 listing, please see A.M. Best’s Briefing, “Natural Catastrophe Exposures Underpin Stable German Reinsurance Buying Trends” Source: Best's Statement File -- Global, A.M. Best data and research

Retention Ratios Company Name 2015 2014 Change R+V Versicherung AG 98.3% 98.3%

Munich Reinsurance Company 95.3% 95.7%

HUK-COBURG Haftpflicht-Unterstützungs 94.9% 94.6%

DEVK Deutsche Eisenbahn Versicherung Sach Huk 92.7% 91.6%

LVM Landwirtschaftlicher Versicherungs 92.3% 92.5%

VHV Vereinigte Hannoversche V. a.G. 91.6% 88.9%

Allianz SE 90.4% 91.8%

Versicherungskammer Bayern Versicherungs 90.3% 89.8%

Landschaftliche Brandkasse Hannover 86.1% 85.7%

Provinzial NordWest Holding AG 86.1% 85.0%

Top Cedants: France




Company Name (Top 10) 2015 2014 2015 2014

AXA S.A. 3,224 2,907 34,931 32,872

Société de Groupe d'Assurance Mutuelle Covéa 809 792 11,573 11,171

SCOR SE 641 518 5,723 4,935

Groupama S.A. 581 550 5,004 4,992

Humanis Prévoyance 509 753 1,973 2,481

Groupe BTP-Prévoyance 372 350 2,211 2,240

ViaSanté Mutuelle 368 314 619 592

GPP Klesia Assurances 344 313 1,000 943

BNP Paribas Cardif 342 306 2,931 2,817

Crédit Agricole Assurances 307 317 4,357 4,059

Total (Top 20) 9,379 8,927 82,389 78,927

Growth (Top 20) 5.1% 4.4%

Notes: For the full Top 20 listing, please see A.M. Best’s Briefing, “France’s Largest Cedants Demonstrate Stable Reinsurance Purchasing” Source: Best's Statement File -- Global, A.M. Best data and research

Top Cedants: France


Retention Ratios

Company Name 2015 2014 Change

Assurances du Crédit Mutuel IARD S.A. 96.5% 96.4%

Macif 95.8% 95.3%

Société de Groupe d'Assurance Mutuelle Covéa 93.0% 92.9%

Crédit Agricole Assurances 93.0% 92.2%

AXA S.A. 90.8% 91.2%

SCOR SE 88.8% 89.5%

Groupama S.A. 88.4% 89.0%

BNP Paribas Cardif 88.3% 89.2%

La Mutuelle Générale 86.2% 85.2%

Malakoff Mederic Prévoyance (MMP) 85.0% 85.4%

Notes: For the full Top 20 listing, please see A.M. Best’s Briefing, “France’s Largest Cedants Demonstrate Stable Reinsurance Purchasing” Source: Best's Statement File -- Global, A.M. Best data and research

Expectations and Impact on Ratings


Trend to continue, albeit not as pronounced

European top 20 and the rest – drivers differ

Changes in reinsurance buying not sufficiently material to have an impact on ratings

Indirect impact – capital optimisation, balance sheet protection, ERM


Q&A Catherine Thomas

Senior Director

Upcoming Events


When & Where: Sunday 10 September 2017 – 10:15-11:45 (CEST) Hermitage Hotel, Salle Eiffel II, Monte Carlo 98000, Monaco www.ambest.com/events/rmbseptembre2017 When & Where:

Wednesday 15 November 2017 – 08:30-13:00 (Briefing) & 14:00-16:00 (Seminar) etc.venues St. Paul's, 200 Aldersgate, St. Paul's, London EC1A 4HD www.ambest.com/events/imbeurope


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Documents

2017 Reinsurance Market Briefing - Zurich - A. M. Best · No part of this presentation amounts to sales / marketing activity and A.M. Best’s Rating ... 2017 Reinsurance Market Briefing