LONDON, 4 September 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 financial position of the world’s leading reinsurers for the first half of 2012.
Aon Benfield Analytics estimates that total global reinsurer capital totaled a record USD480 billion at June 30, 2012, an increase of 5 percent (USD25 billion) relative to December 31, 2011. This calculation is a broad measure of capital available for insurers to trade risk with and includes both traditional and non-traditional forms of reinsurance capital.
The firm's latest study found that capital reported by the ABA group of 31* publicly reporting reinsurers rose by 6 percent or USD15 billion to USD286 billion, driven primarily by USD14.5 billion of net income and USD8.6 billion of unrealized capital gains. Dividends and share buybacks totaled USD9.1 billion.
Further key findings of the ABA study include:
Gross property and casualty insurance and reinsurance premiums written by the ABA rose by 6 percent to USD92.0 billion, principally driven by higher pricing in loss affected lines, with a number of companies deploying new sidecar capacity for catastrophe business. Net premiums written rose by 5 percent to USD76.3 billion.
The ABA combined ratio stood at 90.1 percent, down from 117.8 percent in the first half of 2011, producing an underwriting profit of USD6.6 billion, with all but one constituent reporting positive results.
The contribution to the combined ratio from natural catastrophe losses totaled 2.5 percentage points (USD1.6 billion), down from 31.8 percentage points (USD19.6 billion) in the first half of 2011.
The benefit to the combined ratio from prior year reserve releases was 3.2 percentage points (USD2.1 billion), down from 4.7 percentage points (USD2.9 billion) in the first half of 2011.
The total investment return reported by the ABA companies through their income statements fell by 4.9 percent to USD18.1 billion, representing an annualized investment yield of 3.8 percent.
Pre-tax profits reported by the ABA companies totaled USD17.8 billion, up from only USD1.4 billion in the first half of 2011, with all 31 constituents reporting positive results.
Mike Van Slooten, Head of Aon Benfield’s International Market Analysis team, said: “In stark contrast to the prior year, the relatively low level of insured catastrophe losses in the first half of 2012 allowed most ABA companies to report good earnings and consequent capital growth.”
To access the report, visit: http://thoughtleadership.aonbenfield.com/Documents/201209_marketanalysis_1h_2012.pdf
*Notes to editors
The Aon Benfield Aggregate (ABA) report is now produced on a half-yearly basis, to allow the inclusion of certain companies that do not report quarterly. The aim is to provide a more representative view of the global property and casualty reinsurance marketplace. The new constituents are Amlin, Beazley, Catlin, Hiscox, Lancashire and QBE, while American Agricultural, Ariel and Maiden are no longer included. A full list of the 31 ABA companies can be found in Appendix 1. All are publicly-listed, with the exception of two US subsidiaries of Berkshire Hathaway, namely General Reinsurance Corporation (GenRe) and National Indemnity Company (NICO). Prior year comparisons have been restated to reflect these changes.
Alleghany Corporation has replaced Transatlantic Holdings, Inc. as a constituent of the ABA, as a result of the acquisition that became effective on March 6, 2012. Alleghany’s published results only include the contribution of Transatlantic from that date. For the purposes of the ABA capital calculation, Transatlantic’s reported capital has been included in previous year-end totals.
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.
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