Reinsurance sector delivers record-high ROE; digital maturity strongly correlated with high insurer performance
NEW YORK, NY, April 13, 2023 – ACORD, the standards-setting body for the global insurance industry, today released the results from the first ACORD Global Insurance Stock Index Update of 2023. The ACORD Global Insurance Stock Index tracks the performance of the world’s largest publicly traded insurance carriers, spanning the life and non-life sectors. This quarter’s update includes a new metric assessing insurer stock performance relative to digital maturity.
The first quarter update revealed a positive year-over-year return of +2.9% for the insurance industry, in contrast to a global equity market decline of -9.1%. The reinsurance sector demonstrated record-high performance overall with +23.6% total return, likely driven by strong premium and exposure growth, improved underwriting results, robust investment gains, and added operating leverage. Other lines of business (P&C, multi-line, life) also experienced above-average returns.
ACORD introduced a new metric in this iteration of the Stock Index to evaluate carrier performance relative to their level of digital maturity, as evaluated in the annual ACORD Insurance Digital Maturity Study. Insurers were segmented into five categories based on their digital maturity, ranging from the most digitally mature (“Digital Competitors”) to least digitally advanced (“Digital Laggards”). The Stock Index results reinforce the findings of the Digital Maturity Study, with Digital Competitors delivering year-over-year returns of +7.4% — significantly outperforming all other segments and more than doubling the average of just over 3%.
“The strong performance of the insurance industry in the first quarter of 2023 is a testament to the industry’s tremendous resiliency – and digitalization continues to play a crucial role,” said Bill Pieroni, ACORD President & CEO. “The results further validate the need for insurance stakeholders to embrace the digitalization imperative so that they can better navigate the ongoing changes and opportunities in the global market.”
The proprietary ACORD Global Insurance Stock Index is an extension of ACORD's Global Value Creation methodologies and corresponding studies across both P&C and Life. It is tracked in quarterly updates which analyze quarterly and annual change in share prices, and provide performance metrics and insights by line of business, geographic region, and company size. The returns are based on the market capitalization weighted average of individual company returns, based on local currencies.
Quarterly updates on the ACORD Global Insurance Stock Index are available as a free resource to ACORD members. To learn more about ACORD R&D, please visit www.acord.org/research.