Apr 11, 2012
LONDON, 11 April 2012 – Aon Benfield, the global reinsurance intermediary and capital advisor of Aon plc, today launches the latest edition of its Aon Benfield Aggregate (ABA) report, which analyses the year end 2011 financial position of the world’s leading reinsurers and examines how 2011 catastrophe losses affected their capital and earnings positions.
Aon Benfield Analytics estimates that total global reinsurer capital was down 3% over the year to USD455 billion at December 31, 2011.
The firm’s latest study found that capital reported by the ABA group of 28 leading reinsurers reached an all-time high of USD251 billion at the end of 2011 – an increase of 1.7% or USD4.2 billion from the end of 2010. A reduction of 3.4% in the first quarter of 2011 was replaced by growth of 1.7%, 1.1% and 2.3% in the three subsequent quarters.
The primary contributors to ABA capital growth were net income of USD11.7 billion and unrealized capital gains of USD5.0 billion. The main offsetting factors were dividends and share buybacks totaling USD13.7 billion.
Across the ABA as a whole, return on average common equity declined from 10.4% in 2010 to 4.6% in 2011, driven by the higher level of catastrophe losses and the relative absence of realized and unrealized investment gains.
Further key findings of the ABA include:
1. Gross property and casualty premiums written increased by 11% to USD136 billion with contributory factors including acquisitions, reinstatement premiums and organic growth in certain primary insurance lines
2. The combined ratio rose by 13.5 percentage points to 108.2%, including a contribution of 23.4% from USD26 billion of natural catastrophe losses
3. The non-life underwriting result fell by USD14.2 billion to a loss of USD9.1 billion, despite a positive contribution of USD6.5 billion from prior year reserve releases
4. Direct exposure to sovereign debt issued by Portugal, Italy, Ireland, Greece and Spain remains low and is restricted to a handful of ABA constituents.
Mike Van Slooten, head of Aon Benfield’s International Market Analysis team, said: “The reinsurance sector remains strong after a testing year in 2011 and continues to provide very efficient underwriting capital to insurers. The volatility sustained by reinsurers was substantial and materially improved the earnings and capital reported by insurers affected by unusual frequency and severity of events occurring in 2011. The value proposition of reinsurance has rarely been so clearly demonstrated.”
To access the report, visit: http://thoughtleadership.aonbenfield.com/ThoughtLeadership/Documents/201204_ab_marketanalysis_fy2011.pdf
About Aon Benfield
Aon Benfield, a division of Aon plc, is the world’s leading reinsurance intermediary and full-service capital advisor. We empower our clients to better understand, manage and transfer risk through innovative solutions and personalized access to all forms of global reinsurance capital across treaty, facultative and capital markets. As a trusted advocate, we deliver local reach to the world’s markets, an unparalleled investment in innovative analytics, including catastrophe management, actuarial and rating agency advisory. Through our professionals’ expertise and experience, we advise clients in making optimal capital choices that will empower results and improve operational effectiveness for their business. With more than 80 offices in 50 countries, our worldwide client base has access to the broadest portfolio of integrated capital solutions and services. To learn how Aon Benfield helps empower results, please visit aonbenfield.com.
Aon plc (NYSE: AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and
human resources solutions and outsourcing services. Through its more than 61,000 colleagues worldwide, Aon unites
to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon's global partnership and shirt sponsorship with Manchester United.
t: +44 (0)20 7522 4016
t: +44 (0)20 7522 8183
t: +44 (0)20 7882 0541
If you elect to comment or engage with our content via third-party social media websites, you authorize Aon to have access to certain social media profile information. Please click here to learn more about information that may be collected when using these tools on Aon.com