Global reinsurers on solid capital footing: Aon Benfield

A new report observes that property catastrophe reinsurers deserve their high credit quality rating because of their track record in claims payments, market disclosure and management processes.

Aon Benfield’s Credit Risk of Property Catastrophe Reinsurers examines the credit quality of reinsurers since 2000. The reinsurance intermediary of Aon notes that in the past 12 years, only eight reinsurers have been declared insolvent despite paying claims of more than $150 billion (all figures U.S.) from events including the World Trade Center attacks, hurricanes Rita, Wilma and Katrina, the Great Tohoku earthquake, and the Thailand floods. 

These insolvencies represented less than 1% of global reinsurer capital. Further, those declared insolvent still managed to settle 99% of their outstanding obligations.

“In 2011 alone, the industry was impacted by $105 billion of insured losses across 253 separate events, with a significant amount of this risk ceded to the reinsurance industry – more than in 2005, “ says Kelly Superczynski, Aon Benfield’s head of Global Rating Agency Advisory.

”Despite this loss experience, reinsurance capital stood at $455 billion at the end of 2011 – virtually unchanged from the end of 2010. This level of resilience highlights that reinsurance is one of the most secure and accretive forms of capital available in the global marketplace.”