Reinsurance

Reinsurance is insurance for insurance companies. Just as individuals and businesses buy insurance to protect their assets, primary insurers, the companies that sell insurance to consumers, buy reinsurance to protect their profits and solvency. Reinsurance fosters competitive insurance markets by enabling smaller insurers to compete with larger ones. It strengthens U.S. insurers by giving them access to global resources. Reinsurance is often sold in layers, reaching up into the millions of dollars to protect insurance companies from possible, but statistically highly unlikely events, such as an extraordinary number of homeowners claims as a result of a hurricane or a large single event, such as the destruction of a high-value asset or a massive legal judgment. As shown in the chart below, many reinsurers of U.S. risks are owned by offshore firms.

 

TOP TEN U.S. PROPERTY/CASUALTY REINSURERS OF U.S. BUSINESS BY GROSS PREMIUMS WRITTEN, 2013

($000)

Rank Company (1) Country of parent company Gross premiums written
1 QBE North America Australia $5,896,257
2 National Indemnity Company (Berkshire Hathaway) (2) U.S. 5,494,058
3 Swiss Reinsurance America Corporation Switzerland 4,941,108
4 Everest Reinsurance Company  Bermuda 4,348,736
5 Munich Re America, Corp. Germany 4,267,168
6 XL Reinsurance America Ireland 3,380,109
7 Transatlantic Reinsurance  U.S. 3,138,346
8 Odyssey Reinsurance Group Canada 2,539,263
9 Partner Reinsurance Company of the U.S. Bermuda 1,623,083
10 General Re Group U.S. 1,206,713

(1) See Reinsurance Underwriting Report footnotes posted at http://www.reinsurance.org for list of affiliated companies included.
(2) Underwriting results exclude assumptions from affiliated General Re Group.

Source: Reinsurance Association of America.

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