Global reinsurer’s capital grows to $575bn

Global reinsurance capital rose by 6 percent to $575 billion in 2014, including a 28 percent increase in alternative capital to $64 billion, according to estimates by Aon Benfield.

The firm’s latest Aon Benfield Aggregate (ABA) report that analyses of the financial results of 31 major reinsurer’s, reveals that capital among these firms rose by 2 percent in 2014 to $346 billion. Within this group, net income of $38.5 billion was offset by dividends and share buybacks of $22.3 billion.

At the 29 publicly listed ABA reinsurers property and casualty (P&C), premiums rose by 2 percent to $198 billion, with reinsurance volume unchanged at $89 billion, despite the industry’s pricing pressure.

The group’s combined ratio improved by 0.3 percentage points to 89.9 percent and P&C underwriting profit rose by 6 percent to $16.8 billion.

Net catastrophe losses declined from 5.6 percent to 3.8 percent of net premium earned and were well below the long-term average.

Support from the favourable development of prior year reserves rose by 7 percent to $8.0 billion, equivalent to 4.8 percent of net premium earned.

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.”

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