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Global reinsurance capital reaches record levels


September 5, 2012   by Canadian Underwriter


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Total global reinsurer capital totalled a record $480 billion (all figures U.S.) at the mid-year point of 2012, notes a new report by Aon Benfield, the intermediary and capital advisor of Aon.

That number represents a 5% increase from year-end 2011, states the latest Aon Benfield Aggregate (ABA) report. In its study of 31 publicly reporting reinsurers, the reinsurance brokerage notes the increase in capital was “driven primarily by $14.5 billion of net income and $8.6 billion of unrealized capital gains.”

The aggregate report also found that reinsurance premiums written by the group rose by 6% to $92 billion, with an underwriting profit of $6.6 billion. The combined ratio for the reinsurer group stood at 90.1% as of June 30, 2012, a substantial improvement over the 117.8% posted last year at the same time.

The relatively benign impact of natural disasters contributed only 2.5 percentage points, or $1.6 billion, to the combined ratio so far this year, compared to 31.8 percentage points ($19.6 billion) by mid-year 2011.

“In stark contrast to the prior year, the relatively low level of insured catastrophe losses in the first half of 2012 allowed most ABA companies to report good earnings and consequent capital growth,” says Mike Van Slooten, head of Aon Benfield’s International Market Analysis team.