LONDON, 24 October 2010 – Aon Benfield, the world’s premier reinsurance intermediary and capital advisor, today launches its first survey of global life insurers to understand reinsurance purchasing patterns and help benchmark retention, quantity and price of death & disability catastrophe reinsurance covers.
This enables actuaries to verify pricing calculations for alternative reinsurance pricing structures, and gives intermediaries the ammunition to place and negotiate the most effective and fair reinsurance terms and conditions. 
The survey is based on the responses of 209 life insurers from 14 countries*, which buy a combined catastrophe reinsurance capacity of EUR5.9 billion.  Accounting for the respective market shares, this translates into high quality information on EUR9.0 billion of death & disability catastrophe reinsurance covers.

Key findings include:

• On average globally 78% of the insurance companies surveyed purchase excess of loss per event reinsurance. 
• France and Japan purchase the most death & disability catastrophe reinsurance cover, buying total limits of EUR2.2 billion and EUR1.7 billion respectively. 
• The average global Rate-On-Line (amount paid per unit of cover) is just below 1% and the national averages range from 0.5% in The Netherlands to 3% in Colombia.
• The global trend is to buy cover up to on average 44x Maximum Any One Life (MAOL) over a 5x MAOL deductible.
• The standard treaty allows one reinstatement costing 100% of original price in most of the studied countries.

Marc Beckers, head of Aon Benfield Analytics for EMEA, said: “Against a backdrop of more spending power from insureds, maturing markets and increasing risk, it’s crucial to grasp the evolving characteristics of the death & disability catastrophe reinsurance markets.  For most life insurers, pandemics and terrorism attacks are key drivers of purchasing and Solvency II will likely serve as a catalyst for further purchasing of death & disability catastrophe reinsurance to access efficient capital relief.”
 
Aon Benfield has surveyed the French market on death & disability catastrophe cover since 2003 and today’s first global survey has evolved to provide a broader insight. This is to reflect the global nature of reinsurance buying, that catastrophe events are likely to affect several countries at the same time, to inform insurers with multinational portfolios and compare the purchasing behaviors and prices to help influence strategic decisions.
 

Ends

* Canada, Colombia, Belgium/Luxembourg, Denmark, France, Germany, Italy, Japan, Netherlands, Portugal, Spain, Switzerland, Turkey, UK

About Aon Benfield
As the industry leader in treaty, facultative and capital markets, Aon Benfield is redefining the role of the reinsurance intermediary and capital advisor. Through our unmatched talent and industry-leading proprietary tools and products, we help our clients to redefine success. Aon Benfield offers unbiased capital advice and customized access to more reinsurance and capital markets than anyone else. As a trusted advocate, we provide local reach to the world’s markets, an unparalleled investment in innovative analytics, including catastrophe management, actuarial, and rating agency advisory, and the right professionals to advise clients in making the optimal capital choice for their business. With an international network of more than 80 offices in 50 countries, our worldwide client base is able to access the broadest portfolio of integrated capital solutions and services. Learn more at aonbenfield.com.

Media contacts
David Bogg
Aon Benfield
t: +44 (0)20 7522 4016
e: david.bogg@aonbenfield.com 

Andrew Wragg
Aon Benfield
t: +44 (0)20 7522 8183
e: andrew.wragg@aonbenfield.com     

Alexandra Lewis
Aon Benfield
t: +44 (0)20 7882 0541  
e: alexandra.lewis@aonbenfield.com