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Global reinsurer capital reaches USD510 billion, an increase of 1% year-to-date, according to Aon Benfield Aggregate study
A continuing influx of new funds from capital markets investors offsets the unwinding of unrealized investment gains

LONDON, 2 September 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 the first half of 2013.

Aon Benfield Analytics estimates that global reinsurer capital totaled USD510 billion at June 30, 2013, an increase of 1% (USD5 billion) relative to December 31, 2012. 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 fell by 1% (USD4 billion) to USD313 billion; solid earnings being offset by more active capital management, adverse foreign exchange movements and unrealized losses on bond portfolios.

Further key findings of the ABA study include:

  • Gross property and casualty (P&C) insurance and reinsurance premiums written by the ABA rose by 5% to USD109 billion. The main engine of organic growth was the US market, driven by improving economic conditions and higher pricing in certain primary insurance lines
  • The ABA combined ratio improved by 1.7 points to 89.0%, driven by improved attritional loss experience and more favorable prior year reserve development
  • P&C underwriting profit rose by 26% to USD8.9 billion, with all constituents reporting positive results.
  • Annualized pre-tax operating returns (excluding all realized and unrealized gains and losses) relative to total equity stood at 11.4%, down from 12.0% in the first half of 2012
  • New sidecar sponsorship and the formation of in-house fund management operations are testament to the ABA’s increasing level of engagement with third party capital.

Mike Van Slooten, Head of Aon Benfield’s International Market Analysis team, said: “The ABA companies reported strong underwriting results in the first half of 2013. Interest rates have begun to rise ahead of expected tapering of the Federal Reserve’s quantitative easing program, which is negative for book values in the short-term but positive for earnings in the longer-term. We continue to see evidence of operational restructuring and strategic repositioning, as established reinsurers react to the threats and opportunities posed by the deployment of new funds from capital markets investors.” 
 

Ends

To access the report, visit: http://bit.ly/14kcbaR

Notes to editors

The Aon Benfield Aggregate (ABA) report is produced on a half-yearly basis and covers the reported results of 31 major reinsurers worldwide, with the aim of identifying trends in the non-life reinsurance marketplace. 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).

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.

About Aon

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.

For further information: Alexandra Lewis alexandra.lewis@aonbenfield.com +44 207 882 0541
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