General Ins - Latest News - Reinsurer capital recovers following catastrophe losses


 LONDON, 8 September 2011 – Aon Benfield, the global reinsurance intermediary and capital advisor of Aon Corporation (NYSE:AON), today launches the latest edition of its Aon Benfield Aggregate (ABA) report, which analyses the financial position of the world’s 28 leading reinsurers at June 30, 2011, and examines how the year’s major natural catastrophe events have impacted their first half earnings and capital.
 
 Aon Benfield Analytics estimates that total global reinsurer capital reached USD445 billion at June 30, 2011. This figure is a broad measure of the combined traditional and non-traditional reinsurance capital available worldwide.
 
 Meanwhile, the group of 28 leading reinsurers that comprise the ABA reported capital totaling USD242.4 billion at June 30, 2011 – a decline of 1.7% or USD4.2 billion since the end of 2010. The main contributors to this change in capital position were USD1.2 billion of net income, USD0.8 billion of new capital and USD2.4 billion of foreign exchange gains, offset by USD7.1 billion of dividend payments and USD2.5 billion of share buybacks.
 
 Other key findings within the ABA include:
 · The first half combined ratio for the 28 ABA companies rose by 20.9 percentage points to 120.6%, with USD18.2 billion of catastrophe losses representing 34.1% of net premiums earned. This translated into a property and casualty underwriting loss of USD11.0 billion.
 · The total investment return reported by the ABA reinsurers fell by 12% to USD18.5 billion, driven by a much lower level of capital gains.
 · The overall net income of USD1.2 billion reported by the ABA companies for the first half of 2011 represented a return on average common equity of 0.5%. This followed a return of USD23.8 billion, or 10.4%, for the whole of 2010.
 
 Mike Van Slooten, International head of Aon Benfield Analytics’ International Market Analysis team, said: “Despite the elevated level of catastrophe losses over the past 18 months, financial strength ratings have remained broadly unchanged, reflecting continued robust capital positions.”

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