The firm's latest study found that capital reported by the ABA companies rose by 2% to USD346 billion. Net income of USD38.5 billion was offset by dividends and share buybacks of USD22.3 billion.
Further key findings relating to the 29 publicly-listed holding companies in the ABA* include:
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Gross property and casualty (P&C) premiums rose by 2% to USD198 billion, with reinsurance volume unchanged at USD89 billion, despite the industry’s pricing pressure.
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The combined ratio improved by 0.3 percentage points to 89.9% and P&C underwriting profit rose by 6% to USD16.8 billion.
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Net catastrophe losses declined from 5.6% to 3.8% of net premium earned and were well below the long-term average.
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Support from the favorable development of prior year reserves rose by 7% to USD8.0 billion, equivalent to 4.8% of net premium earned.
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Return on equity was unchanged at 11.1%, based on net income attributable to common shareholders.
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Reinsurers are incorporating material alternative capital (through ILS, sidecars and asset management mandates) to lower their cost of underwriting capital.
Mike Van Slooten, Head of Aon Benfield’s International Market Analysis team, said:
“Sector consolidation is underway as companies look to achieve the advantages of scale and diversification, one of the drivers being enhanced access to alternative capital. Three recently announced M&A transactions between ABA companies will reduce the number of entities in the study going forward.”
For the Aon Benfield Aggregate report click the link below and to watch the highlights film click here
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