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Many insurers were dealt a double blow in the first quarter as intense competition in the insurance and reinsurance market combined with financial market turmoil in January and February.
Concerns over slowing global economic growth sparked considerable volatility in debt and equity markets. This led to lower investment returns and potential write-downs on investments for some leading insurers. Together with soft market conditions, less favourable reserve developments and US storm losses, this meant that several international insurers and reinsurers posted lower profits in the first quarter.
This week, Spanish insurer MAPFRE announced that its results were hit by the depreciation of Latin American currencies, particularly the Venezuelan bolivar and Brazilian real. Its first quarter revenues fell 3.4% while net profit was 4.8% lower at €192m.
European insurer Allianz said that it expects a good set of results, although its operating profits were also lower in the first quarter. The Munich-based group said that operating profit decreased 3.5% to €2.8bn, while total revenues were 6% lower.
Reinsurers have also seen profits fall in the first quarter. Munich Re's shares fell 6% after the insurer revealed that its Q1 profits would be below expectations.
The reinsurer has been forced to take write-downs on its investments, prompting its chief executive Nikolaus Von Bomhard to warn that its profit target for the year was now looking "ambitious".
UK insurer RSA Insurance Group announced a dip in premiums this week. The insurer did not disclose its Q1 profits, but said it benefited from benign weather and a strong underwriting result in the first quarter.