Another half have adopted a more conscientious and dismissive stance by decreasing their media coverage to these risks.

According to the report, the deviation in strategy is a reflection of the rising cost of natural disasters, which have exceeded loss standards over the course of the past five years despite increases in reinsurers' budget (the aggregate catastrophe budget is expected to rise by almost 20% to US$15.5 billion in 2022).

The following is an excerpt from the report regarding reinsurers who decided to take a conservative and defensive stance: "We saw a large reduction in natural catastrophe exposure in January 2022 for approximately half of 21 reinsurers after they reassessed their risk exposures in certain markets and geographies." Despite many years of price reductions, we feel that this can be explained by the fact that different regions of the world have unequally adequate pricing. Those reinsurers who chose to lower their absolute net exposure to an aggregate loss that occurred once per 250 years saw their business shrink by an average of 20%. This points to a definite de-risking strategy on our part, as we see it."

The decision of reinsurers to raise their exposure to the risk of natural disasters, on the other hand, is apparent in comparison to their citizens' equity, which suggests that the reductions in risk exposure has largely overtaken movements in shareholders' equity for some reinsurers.

The analysis estimates that the top 21 reinsurers as a whole have seen an increase in the average amount of capital that is at risk due to the developments described above.

"During the month of January 2022, the total shareholders' equity that was exposed averaged 28%, which is up from 27% during the same month the previous year. Note: Earnings at risk is defined as a calculated yearly aggregate net loss that occurs once every ten years and is contrasted with normalized forecasted earnings before taxes and net catastrophe claims. According to the study published by SP, "capital at risk" is defined as an annual aggregate net loss against shareholders' equity that is predicted to occur only once every 250 years.

Underwriting margins are expected to rise this year, according to SP, which will provide resilience to the sector. It is possible that an increased pre-tax profit (including the catastrophe budget) for more reinsurers – based on their average share of market losses over the preceding five years – could provide some protection against substantial losses sustained by the covered industry.

The same ideas were presented in a different report that was published by AM Best. This report claimed that many global reinsurance companies had shifted their business mix into casualty and specialty primary lines as a response to the increased losses caused by natural disasters and ancillary perils, as