LONDON, 9 April 2013 – Aon Benfield, the global reinsurance intermediary and capital advisor of Aon plc (NYSE:AON), today launches the latest edition of its Aon Benfield Aggregate (ABA) report, which analyses the financial results of the world’s leading reinsurers in 2012.
Aon Benfield Analytics estimates that global reinsurer capital totaled a record USD505 billion at December 31, 2012, an increase of 11% (USD50 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 leading reinsurers increased by 12% (USD33 billion) to USD313 billion, driven primarily by USD29.5 billion of net income and USD15.9 billion of unrealized capital gains. Dividends and share buybacks rose marginally to USD16.1 billion.
Further key findings of the ABA study include:
Mike Van Slooten, Head of Aon Benfield’s International Market Analysis team, said: "The low interest rate environment not only has impacted what reinsurers earn on their invested funds but it has added significantly to the competitor landscape. Diversified yield seeking investors are now adding material pressure (in terms of price and value competition) and benefits (in terms of lower cost underwriting capital) to the reinsurance market. We expect material changes to the capital structure of the largely equity financed reinsurance market as material new flows of capital are integrated into reinsurance underwriting capital."
To access the report, visit: http://thoughtleadership.aonbenfield.com/Documents/201304_marketanalysis_fy_2012.pdf
*Notes to editors
The Aon Benfield Aggregate (ABA) report is 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. 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 (Gen Re) and National Indemnity Company (NICO).
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, but for the purposes of the ABA capital calculation, Transatlantic’s reported capital has been included in previous year-end totals. Mapfre SA is a new addition to the ABA, while Flagstone Reinsurance Holdings SA has been removed following its acquisition by Validus Holdings Ltd on November 30, 2012. Prior year comparisons have been restated to reflect these changes.
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 62,000 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.
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