Aon Benfield hass launched the latest edition of its Aon Benfield Aggregate (ABA) report, which analyses the year end 2011 financial position of the world’s leading reinsurers and examines how 2011 catastrophe losses affected their capital and earnings positions.
Aon Benfield Analytics estimates that total global reinsurer capital was down 3% over the year to $455bn at 31st December.
The firm’s latest study found that capital reported by the ABA group of 28 leading reinsurers reached an all-time high of $251bn–an increase of 1.7%. A reduction of 3.4% in the first quarter of 2011 was replaced by growth of 1.7%, 1.1% and 2.3% in the three subsequent quarters.
The primary contributors to ABA capital growth were net income of $11.7bn and unrealized capital gains of $5.0bn. The main offsetting factors were dividends and share buybacks totaling $13.7bn.
Further key findings of the ABA include:
-Gross property and casualty premiums written increased by 11% to $136bn with contributory factors including acquisitions, reinstatement premiums and organic growth in certain primary insurance lines
-The combined ratio rose by 13.5percentage points to 108.2, including a contribution of 23.4 from $26bn of natural catastrophe losses
-The non-life underwriting result fell by $14.2bn to a loss of $9.1bn, despite a positive contribution of $6.5bn from prior year reserve releases
-Direct exposure to sovereign debt issued by Portugal, Italy, Ireland, Greece and Spain remains low and is restricted to a handful of ABA constituents.
Mike Van Slooten, head of Aon Benfield’s International Market Analysis team, said “The reinsurance sector remains strong after a testing year in 2011 and continues to provide very efficient underwriting capital to insurers. The volatility sustained by reinsurers was substantial and materially improved the earnings and capital reported by insurers affected by unusual frequency and severity of events occurring in 2011. The value proposition of reinsurance has rarely been so clearly demonstrated.”
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