Bermudian-based Arch Capital Group Ltd has been named the fastest-growing firm among the world’s largest property and casualty insurers, according to S&P Global Market Intelligence.

Its gross premium earned rose 23.1 per cent year on year to $17.02 billion in 2023 from $13.83 billion in 2022.

S&P said Arch’s reinsurance business was a big contributor to its overall growth. The segment’s net premiums earned rose 47.4 per cent year-on-year to $5.84 billion.

The company, which ranked 32nd in this analysis, in its 2023 annual statement, credited improved market conditions and competitors reducing their capacity for the reinsurance growth. Arch’s insurance segment boosted net written premiums 19.4 per cent to $5.45 billion.

Reinsurance also played a large role in pushing up premiums at French mutual Groupe Covéa, which was a close second to Arch in terms of overall growth, with a 19.4 per cent year-on-year increase in gross premiums earned.

Reinsurance makes up 37 per cent of Covéa's book of business. It owns Bermudian-based reinsurer PartnerRe, the world’s tenth-largest reinsurer according to S&P Global Ratings’ 2024 ranking.

Covéa’s insurance gross earned premium was almost flat year-on-year at €16.91 billion (about $18.26 billion) in 2023, according to the group’s annual report, while reinsurance gross earned premiums were up 69.3 per cent to €9.86 billion.

Part of the reason is that Covéa’s 2022 figures only include PartnerRe from July 12, the date Covéa completed its acquisition of the reinsurer.

However, PartnerRe’s own figures show that its non-life net premiums earned were up 4 per cent.

The world’s top 50 property and casualty companies increased their collective premiums by nearly 9 per cent year-on-year in 2023 against a backdrop of rising prices for insurance and reinsurance coverage.

US personal lines powerhouse State Farm Mutual Automobile Insurance Co topped the ranking, with $87.59 billion of direct premiums earned last year.

The insurer held the same position in the previous year’s ranking. State Farm was also the third fastest-growing company in the top 50 in 2023, with an increase in direct premiums earned of 18.3 per cent.

The global reinsurance market underwent a big shift in prices and terms last year, beginning at the January 1 renewals.

Reinsurers raised prices for property catastrophe cover and raised the thresholds at which coverage pays out, known as the attachment point, to cut their exposure to smaller, more frequent natural catastrophes such as fires, floods and thunderstorms, leaving more of those bills to primary insurers.

Prices have increased because of heightened risk perception and high inflation levels, which have elevated property values.

S&P Global said: “State Farm said it had suffered underwriting losses in 2023 due to continued elevated claims severity and significant catastrophe activity, in both auto and homeowners business.”

US personal lines insurers have implemented double-digit price increases both in auto and homeowners insurance to tackle the challenging conditions. Better underwriting performance could be on the way for the industry overall.

S&P Global Market Intelligence’s 2024 US P&C Market Report predicts that the industry will return to underwriting profitability in 2024 with a combined ratio of 99.2 per cent after 2023’s loss-making ratio of 102.6 per cent.

S&P Global said insurers may also be encouraged by property-catastrophe reinsurance prices starting to moderate in 2024. Reinsurance broker Howden Re, for example, reported that its property-catastrophe reinsurance rate-on-line index, based on premiums as a percentage of coverage, fell 5 per cent at the June 1 renewals.

Although prices may be up for negotiation, reinsurers are unlikely to give any ground on attachment points at the upcoming January 1 renewals, when about half the world’s reinsurance coverage renews.