9 September 2014

Reinsurer capital hikes to record level

Global reinsurer capital has hiked up 6 percent, reaching a record level of $570 billion at June 30, 2014.

This is according to Aon Benfield in its latest edition of its Aon Benfield Aggregate (ABA) report, which analyses the financial results of the world's leading reinsurers in the first half of 2014.

The 31 top reinsurers, which were studied for the report, contributed 62 percent, or $351 billion, of global reinsurer capital, an increase of 4 percent of $14 billion.

This was driven primarily by $18.6 billion of net income and $9.4 billion of unrealised capital gains, which was partly offset by $14.3 billion of dividends and share buybacks.

The 29 publicly listed holding companies in the report reported a rise of 4 percent in gross property and casualty premiums to $109 billion, with growth evenly split between insurance and reinsurance business.

Mike Van Slooten, head of Aon Benfield's international market analysis team, said: "The influx of alternative capital is lowering risk transfer costs for both insurers and reinsurers, creating a win-win situation that should drive market expansion in the medium-term.

“Aon Benfield has made major advances in its analysis of reinsurers' financial performance in recent years, in response to growing insurer demand for strategic insight into longer-term industry trends. We are closely monitoring developments in what is a very dynamic environment. As such, peer studies such as the ABA report, which assess comparative performance on a timely basis, are becoming increasingly relevant."

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