Reinsurers’ Financial Communication – 2019 benchmark study (part I)

This year, we decided to publish our study in two parts. This first part of the study focuses on the analysis of intangible assets and deferred acquisition costs, provides an overview on the tax environment and deferred taxes, and gives insight on the performance measurements indicators.

Part II is scheduled for publication later this year. It will focus on the companies’ risk universe. After analysing risk management disclosures, we will focus on Solvency II metrics and provide an overview of Insurance Linked Securities, such as CAT/Mortality bonds, that are sponsored by reinsurance companies.

As highlighted in our previous edition, we note that, overall, reinsurance companies are transparent when it comes to financial disclosures. Compared to 2017, the granularity of information provided remains stable and is in line with IFRS or US GAAP requirements. However, IFRS disclosures seem more comprehensive for intangible assets and deferred taxes.

Information is overall homogenous, enhancing the comparability of benchmarked companies. The most significant discrepancies were noticed on the recoverability of tax losses carried forward where few reinsurers disclose the full set of information.

The panel of reinsurers

In line with the benchmark study published last year, we have focused our attention on several companies whose core business is reinsurance. The companies targeted were selected based on the top 15 reinsurers in the world (based on gross written premiums), from which we excluded one Asian and one Indian company (Korean Re and the General Insurance Corporation of India) and two holding companies (Great West Lifeco and Transatlantic Holdings) due to comparability issues. Compared to last year, we excluded XL + Catlin due to its absorption by AXA and we included in the panel China Re. It should also be mentioned that some reinsurers have also direct insurance business, like Munich Re (via ERGO Group), which were not excluded from this study as we present consolidated group figures.

From a pure information perspective, we have also included AXA and Allianz, later called “selected insurers”, as we considered this information would allow a better understanding of the way reinsurers compare to regular insurers.