Reinsurance stock continued to perform in Q2 – ACORD Global Stock Index

Broader insurance market continued to deliver as well

Reinsurance stock continued to perform in Q2 – ACORD Global Stock Index


By Kenneth Araullo

ACORD announced that its Global Stock Index outperformed the broader market for the second consecutive quarter, delivering a return of 28.9% compared to the worldwide average of 17.3%.

This growth is attributed to a gradual decrease in inflation and modest increases in global output, fostering optimism for continued economic growth and leading to easing monetary policy in select global economies.

Performance in the upcoming quarter is expected to be influenced by Atlantic-basin storms, ongoing geopolitical pressures, and the ability of central banks to achieve a soft landing.

In the reinsurance sector, strong profitability was observed in the second quarter of 2024, driven by lower combined ratios and consistent investment income. The Reinsurance Group of America, Incorporated (RGA), in North America saw a 6.9% increase quarter-over-quarter (Q/Q) and a 51.1% increase year-over-year (Y/Y).

Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft (Munich Re) in München, based in EMEA, reported a 7.0% increase Q/Q and a 40.9% increase Y/Y.

Swiss Re AG (Swiss Re), also in EMEA, posted a 2.1% rise Q/Q and 31.4% rise Y/Y. Conversely, Hannover Rück SE (Hannover Re) in EMEA experienced a 3.7% decline Q/Q but achieved a 25.7% increase Y/Y. Everest Re Group, Ltd (Everest Re), in North America, reported a 3.6% decline Q/Q but a 13.5% increase Y/Y.

Performance across other sectors

The property and casualty (P&C) sector experienced benefits from continued rate increases across all lines, improving loss ratios, and strong investment gains. However, multi-line insurers underperformed due to their exposure to the Chinese market, while life insurers saw strong sales and investment gains overshadowed by economic uncertainty in China.

Regionally, North America experienced strong revenue growth and higher investment yields, driving industry profits. In EMEA, top-line growth and easing claims cost inflation were dampened by significant catastrophe losses.

The LATAM & Caribbean region saw moderate premium growth amidst a sluggish economy and rising climate-related loss costs. In the Asia-Pacific region, global expansion, capital restructuring, and internal investments were offset by macroeconomic uncertainty in selected markets.

Among company sizes, small companies experienced superior share gains driven by M&A rumors and strong financial performance. Medium-sized companies benefited from capital restructuring and robust financial performance among customer, product, and geographic-focused carriers.

Large companies, particularly those not based in China, saw strong results fueled by strategic acquisitions, geographic expansion, and profitability improvements.

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