Global insurance market report [gimar]

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Figure 4.4a:
Gross and net gearing ratio (%, year-end 2004–2018)
Source: 2019 IAIS survey
Figure 4.4b:
Combined and loss ratio (%, year-end 2003–2018)
Source: 2019 IAIS survey
The combined ratio improved slightly from 99.3% 
in 2017 to 98.6% in 2018.
The expense ratio (net operating expenses to net 
premiums earned) provides insight into reinsurers’ 
operational performance. The loss ratio measures 
the total losses incurred as a proportion of total 
premiums earned. While the loss ratio improved 
from 72.4% in 2017 to 68.4% in 2018, the 
expense ratio increased by 330 basis points
to 30.2%.
The constant movement in the combined and 
gearing ratios indicates the volatility in the 
reinsurance sector’s profitability. The ratios
are, however, very sensitive to large payouts, 
such as those experienced following severe 
natural catastrophes.

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Figure 4.5a:
Reinsurance capacity (USD billion, year-end 2014–2018)
Source: 2019 IAIS survey
Figure 4.5b:
Reinsurance capacity – composition of total available capital (USD billion, year-end 2014–2018)
Source: 2019 IAIS survey
4.5 CAPITAL ADEQUACY
Traditional reinsurers maintained a strong capital 
base in 2018. Capital levels of reporting reinsurers 
increased to $423 billion, growing by 3.4% 
between 2017 and 2018. This is largely due to 
inflows to maintain or increase coverage against 
losses following extreme weather events in 2017. 
During the same period, the total regulatory 
capital required of reporting reinsurers increased 
by 3.2%, while the survey sample’s capital base 
was $228 billion above its regulatory capital 
requirement (slightly above the $220 billion 
requirement in 2017).
Figures 4.5b and 4.5c show that retained 
earnings represented 44% of the total available 

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