Advertise
Resources
Member, Beacon International Group, Ltd.
Year-end reinsurance renewal rates will likely be flat or slightly lower, according to Aon Benfield, the reinsurance brokerage arm of Aon Corp.
Speaking at a briefing on the reinsurance market, Dominic Christian, London-based co-chief executive of the reinsurance broker, said that exceptions to the soft renewal may include single-digit rate increases on some loss-affected lines, such as energy, property catastrophe business and some financial institutions business.
While some areas of the primary insurance market are experiencing rate increases, there is often a lag before such increases are relayed to the reinsurance market, he said.
The world’s 30 largest reinsurers reported about $442 billion in total capital at the end of the first half of 2010, a 10% increase from the reinsurers’ capital position at the end of 2009, according to a report, “The Aon Benfield Aggregate,” released Tuesday.
The capital increase reflects the improved operating results over the past 18 months as well as the stabilization and recovery of financial markets, according to the report.
The combined ratio for the reinsurers increased to 100% for the 2010 first half from 91.5% for the first half of 2009. The increase was caused by increased catastrophe losses and higher underwriting expenses in the first six months of 2010, the report notes. Positive prior-year reserve development helped temper the increase in combined ratio.
The 30 reinsurers reported $15 billion in total pre-tax profits for the first half of 2010, a 65% increase from the comparable period last year, Aon Benfield said.