The latest edition of Aon Benfield Aggregate (ABA) report has been launched. This report analyses the financial position of the world’s leading reinsurers at the end of the first quarter. (see www.aon.com/attachments/reinsurance/150611_aba_q1_2011.pdf)
Aon Benfield Analytics estimates that total global reinsurer capital declined 6% from USD470 billion at December 31, 2010 to USD440 billion at March 31, 2011: the primary driver being the high level of insured catastrophe losses in the quarter. This calculation is a broad measure of capital available for reinsurance and includes both traditional and nontraditional forms of reinsurance capital.
The latest study compiled by the Market Analysis team found that the ABA group of 28 leading reinsurers reported capital totalling USD238.3 billion at the end of the first quarter – a decline of 3.4% or USD8.3 billion from the end of 2010. The main contributory factors were USD4.3 billion of net losses, USD2.5 billion of unrealized investment losses, USD2.0 billion of dividend payments and USD2.0 billion of share buy-backs.
The first quarter combined ratio rose by 38.3 percentage points to 143.7%, with USD15.1 billion of catastrophe losses representing 57.1% of net premiums earned. This translated into a property and casualty underwriting loss of USD11.5 billion. The total investment return reported by the ABA fell by almost a third to USD9.0 billion, driven by a much lower level of capital gains.
The overall net loss of USD4.3 billion reported by the ABA reinsurers for the first quarter of 2011 represented a negative return on average common equity of 1.8%. This followed a return of 10.4% or USD23.5 billion for the whole of 2010.”
Mike Van Slooten, head of Aon Benfield’s International Market Analysis team, said: “The ABA entered 2011 with peak levels of capital and the decline in reported shareholders’ funds was only 3.4% in the first quarter, despite significant incurred catastrophe losses. We would expect to see this recovered in the second quarter, everything else being equal.”
Source : Aon Benfield
