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Hello! This is a quarterly update on reinsurance sector. We are mid-way through reinsurance earnings season for Q1 reporting, so I wanted to post an update. For review, I have previously written about investment metrics that I follow among the reinsurers. I wanted to post a mid-earnings update, to summarize results to date, and help position for the remaining results to be released next week.

Q1 results

companycurrent priceQ1 BVQ1 P/BQ1 Combined RatioQ4 Combined Ratiomarket cap (NYSE:B)% of 52wk hi
Aspen Insurance Holdings (NYSE:AHL)$37.5240.792%90%108%2.4696%
Axis Capital Holdings (NYSE:AXS)$43.5144.797%83%112%5.3198%
Montpelier Re Holdings (NYSE:MRH)$25.6727.593%62%116%1.3993%
Platinum Underwriter (NYSE:PTP)$56.2260.293%45%25%1.7996%
Validus Holdings (NYSE:VR)$38.5941.693%61%123%4.1596%

Initial thoughts are that results have been an overall success. Combined ratios haven't been this low in a few years. It is indeed nice when there aren't major catastrophes. Book value growth has been good as a result, which helped bring the price to book ratios a little more down to earth - meaning below 100%. We're still over 90% for P/BV on all of these companies, and prices remain pretty close to 52-week highs.


So far, Validus is the company I like most at current valuations. Aspen Insurance is another favorite. It sold off the morning after earnings, to the tune of about 4%. This is indicative of how high expectations had gotten, and this might create some additional opportunities next week.

If you have been waiting to deploy cash in this sector, which I have been recommending for 4 months now, it may be a painful wait watching these stocks continue to go up. I still favor hanging tight - hurricane season will be here right around the corner. These stocks aren't a momentum trade - buy Amazon or Apple if that's your trade. These are deeply cyclical stocks enjoying a favorable period lately. XL Group (NYSE:XL) is another company due to report next week, and has been favorably valued.

A few more companies in the reinsurance universe that I follow don't report until next week, so I will include those results on a update next weekend.

Disclosure: I am long VR, AHL, AXS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.