The World's Largest Reinsurance Groups: A Look at Names, Numbers, Countries and Performance

Abstract

Many reinsurance companies have, in the past decade, increased their foreign direct investment and acquired other companies in part because of the belief that only very large players will have the cost advantages necessary to remain competitive in global markets. Since the strategic decision to expand activities in several foreign markets is implemented at the group level, the focus of this paper is to examine data available on the internationalization process of the world’s largest reinsurance consolidated groups.By examining the distribution of the total net premiums written by the largest reinsurance groups in the world, this paper documents several dimensions of the change in market concentration: the trend in concentration in the world's largest groups, and the relative position of these groups by countries. It also examines the geographic distribution of the world’s largest reinsurance groups and the factors explaining their preferred locations of activities. Finally, the paper examines the relationship between geographical diversification and the performance for the world’s largest reinsurance groups. It is verified that the form and nature of the relationship between international diversification and performance follow an S-shaped curve with increased diversification of the largest reinsurance groups.