The ratings agency used its updated Best’s Credit Rating Methodology (BCRM) and its new building block approach as part of its analysis.

It found that approximately two-thirds of the rated population has the strongest category of balance sheet strength and that no companies fell below the strong category.

This is mostly due to the reinsurers’ surplus growth, which stems from generating positive cash flows and loss reserve redundancies, managing high quality investment portfolios, and maintaining appropriate reinsurance structures to protect surplus, the report said.

Steven M. Chirico, a Director in A.M. Best’s property/casualty ratings division, said: “The analysis of the global reinsurance market using the building-block approach accentuates the value of the approach in that is based on the convergence of multiple analytical assessments that result in a published rating.”

The three hurricanes will make up the bulk of the losses for the quarter, with the loss expected to be €2.7 billion ($3.19 billion). Other natural catastrophe losses included those from the Mexico earthquakes.

The global reinsurer will post a loss of €1.4 billion ($1.65 billion) for the period from July to September 2017 and now projects a small profit for the full year 2017.

Jörg Schneider, Chief Financial Officer of Munich Re, said: “High losses from severe natural catastrophes are part and parcel of our business; that is why we are here.

“Our capital base remains very strong. We will continue to offer our clients full reinsurance capacity.

“Moreover, Munich Re has enough capital to take advantage of the opportunities this exceptional situation provides in terms of profitable growth.”

It’s third quarter 2017 Breach Insights report found fraudsters use social engineering attacks to prey on employees’ role within their companies to orchestrate disclosure of information or the wire transfer of money to criminals.

These can occur in the months leading to tax filing deadlines when fraudsters target emails to a specific company employee to forward copies of all the company’s W-2 forms, resulting in criminals using false tax returns to claim refunds.
Criminals also impersonate a trusted party such as a company executive or payment system vendor to cause a fraudulent payment.

In Q1 to Q3 of 2016, social engineering attacks accounted for 1% of incidents handled by Beazley Breach Response (BBR) Services, but this increased to 9% of the 2,013 incidents reported to BBR services for the same time period in 2017.

For the first nine months of 2017, the predominant cause of data breach remained hacking and malware, accounting for 34% of the total reported. This included cyber extortion, which made up 30% of the total 34% recorded.

This is a revised estimate from an earlier assessment which was issued on January 26, 2017, three months after the event, that put the cost at €125 million ($147.7 million).

The series of earthquakes impacted the regions of Lazio, Marche and Umbria with moment magnitudes of Mw 5.4, 5.9 and 6.5, according to the Italian Institute of Geophysics and Volcanology.

Based on the PERILS’ loss estimates and the Italian Civil Protection Agency, which estimates total economic losses at €16.5 billion ($19.5 billion), only 1.3% of the overall economic loss was insured.

He made the comments in an Insurance Insider feature on reinsurance buying habits published during the Baden-Baden reinsurance meeting.

Participants were asked if they thought additional reinsurance cover will be purchased in January renewals as a result of the current competitive rates.

“Potentially yes, but not due to competitiveness of rates,” he said. “The current Q3 U.S. loss environment and historical loss environment in Europe is advocating for more aggregate covers or second retention sublayer ones.

“However, for most, securing the existing coverages at acceptable terms for all parties is probably the main focus that we are seeing at the moment.”

When asked if he thought the trend of centralized reinsurance spending was coming to a halt or reversing, he said: “We don’t think so. More than coming to a halt or reversing, the centralization strategies are maturing.

“As companies are getting a better grasp on their risk appetites and requirements, the use of internal vehicles is being deployed with more business acumen – alongside the financial rationale that they absolutely provide.

“Hence, groups are becoming more tactical at using intra-group vs extra-group, with better-informed decisions and trade-offs between open market use, local or global, and own retention.”

It also reported that the market has so fair paid claims of almost $900 million for Harvey, Irma and Maria.

Lloyd’s Performance Management Director Jon Hancock said that as more information became available, the market was relying less on preliminary estimates.

“The claims estimate for Harvey and Irma has reduced approximately 10% from the precautionary figure we issued with our half year results last month,” he said.

“We are experiencing one of the most active hurricane seasons this century and I am very proud of the way that the Lloyd’s market is responding to these events.

“Focus remains on getting policyholders back up and running, and we are paying claims quickly despite some very difficult conditions in the affected areas.

“Our ability to pay claims quickly even in difficult circumstance is a clear example of the valuable role that our sector plays in society.”

Sompo International will form alliances with Sanlam Limited, the largest financial group in South Africa, and SAHAM Finances, which is the biggest pan-African insurance group, excluding South Africa.

It said the partnership, which will be executed by Sompo Japan Nipponkoa Insurance (SJNK), will give it access to new markets by leveraging the experience and existing footprint of Sanlam and SAHAM.

SJNK said that since establishing an office in Johannesburg, South Africa, in 2014, it had expanded its customer support and insurance market research system throughout the continent, and that the partnership will allow it to support existing Japanese customers in Africa, as well as expanding distribution of new products to local customers.

Junichi Tanaka, Managing Executive Officer of Sompo Holdings and SJNK, said: “This alliance allows us to build Sompo’s reputation as a strong player in Africa by expanding our support to Japanese customers entering the continent.

“Through our new partners we will now have access to 27 African countries in total, more than double the presence of our peers across the continent, providing us with the largest scope of coverage in Africa.”

It said that over the last several years in the U.S., annual SCS losses have consistently exceeded $10 billion, and the latest KCC SCS Reference Model shows that expected average annual aggregate losses are now approaching $20 billion.

The new model uses physical modeling methodology and high resolution atmospheric data to more accurately capture the dynamics of this peril.

It is a multi-peril model and simulates the hazards of hail versus tornadoes and straight-line winds, the company said.

Karen Clark, KCC President and Chief Executive Officer, said: “There has been significant industry demand for a more credible and accurate SCS model.

“While this peril does not pose a solvency threat to most insurers, claims from severe thunderstorms eat away at earnings each year, and our clients want to make sure their rates reflect the most up-to-date science and their actual loss experience.

“We’re pleased to release this new model that can accurately reproduce SCS losses.”

“Whilst most reinsurers produced satisfactory returns on equity and high dividend levels at the end of Q2 2017, the third quarter losses will eliminate much of these earnings and for many will turn into a capital event to varying degrees,” he told an Insurance Insider round table published during the Baden-Baden reinsurance meeting.

“We would expect reinsurer renewal strategies to be influenced by their relative share of the losses – being over or underweight, their dependence on retrocession, their ability to purchase retro or for the ILS markets to reload capital (albeit at higher cost), and their ability to demonstrate a sustainable business model to their investors.”

The round table also discussed the impact that losses from Hurricanes Harvey, Irma and Maria may have on January 1 renewals in Europe.

Mr. Spenner said that in previous large loss years in 2005, 2011 and 2012 there had been single region rate adjustments for loss-affected regions.

He added: “We would anticipate that reinsurers would want to spread the burden of rate adjustments at 1 January as far as possible but would expect that impact on rates will be focused on loss-affected regions and accounts.

He joins from Swiss Re, where he spent 18 years, most recently as Head of Casualty and a member of the Reinsurance Executive Committee.

Based in Zurich, he will lead AXIS’s $2.2 billion reinsurance business and will become a member of the Executive Committee, reporting to President and CEO Albert Benchimol.

“Steve is a remarkable talent and an accomplished and widely respected executive who stands at the forefront of an emerging generation of senior leaders in our profession,” said Mr. Benchimol.

“He is perfectly suited to be CEO of AXIS Re, bringing breadth and depth of experience on a global scale and a client-centric mentality that matches our culture.”

The company also announced that AXIS Re Interim CEO Jan Ekberg will resume his previous role as President and Chief Underwriting Officer of AXIS Re Europe when Mr. Arora takes up his new role in January 2018.

QIC reported a net profit of $84 million for the first nine months of the year compared to $195 million for the same period last year.

Combined GWP for the Bermuda-domiciled reinsurance subsidiary Qatar Re, London-headquartered specialty insurer Antares, and Malta-based subsidiary QIC Europe Limited, grew by 25%.

The company said 2017 would be one of the costliest years on record for natural catastrophes. In addition, the Ogden rate adjustment had impacted UK re/insurers and the global market continued to be soft.

QIC President and Chief Executive Officer Khalifa Abdulla Turki Al Subaey said: “The financial results for the first nine months of 2017 demonstrate QIC Group’s resilience under conditions of severe market stress.

“In view of our significant global footprint and exposure as well as the ongoing diplomatic and economic concerns in the Gulf region, our financial performance is robust.

“The Group’s well-diversified franchise has proven able to tackle the challenges of the marketplace. The adverse impact of these events will be limited to our earnings, with QIC Group’s strong capital position remaining unscathed.”

The report quoted Fitch as saying that while the Mexican earthquakes, California wildfires and Hurricanes Harvey, Irma and Maria are within expected tolerances, they “place some pressure on Lloyd’s capital”.

It said that following a review of recent catastrophes, Fitch has affirmed Lloyd’s ratings, but the outlook remains negative.

While the capital is pressured, Fitch expects Lloyd’s to be able to recapitalize, but third quarter 2017 losses place an additional pressure on the outlook for the re/insurance market.

Fitch noted that Lloyd’s capitalization will “likely deteriorate to a level that is not in line with the current rating as a result of 3Q17 catastrophe losses,” according to the report.

Fitch expects this to be temporary and that Lloyd’s will restore its capitalization rates to a level commensurate with the rating as part of the ‘coming into line’ process that closes before end-2017.

Intelligent Insurer quoted Jean-Jacques Henchoz, Swiss Re’s Chief Executive of Reinsurance, as saying that while the extent of U.S. hurricane losses was still developing, these are expected to have an impact on the global dynamics of the reinsurance market.

“There will be a spillover and I don’t believe any region will be spared what is happening globally,” it quoted him as saying.

“Bear in mind there have also been many other loss events, although not on the same scale in Asia and in Latin America, and the market will react on a global basis.

“It does not seem at this stage that this will be a capital event for the industry, although some players could be hit harder than others. But I’m convinced it will influence pricing for reinsurers.”