Reinsurers worldwide reached total capital of $505B in 2012: Study
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The total capital of the world's reinsurers increased by an estimated 11% during 2012 to reach a record $505 billion, according to Aon Benfield's latest aggregate study.
Aon Benfield, the reinsurance brokerage arm of Aon P.L.C., studied the financial reports of 31 leading reinsurers and found that their capital increased by 12% to $313 billion by the end of 2012.
This increase was driven primarily by net income of $29.5 billion and $15.9 billion of unrealized capital gains, noted Mike Van Slooten, head of Aon Benfield's international market analysis team in London.
All 31 reinsurers covered by The Aon Benfield Aggregate report reported profits for 2012, with an overall pretax profit of $35.7 billion, up from $15.6 billion in 2011.
The property/casualty combined ratio of the 31 reinsurers studied was 92.6% for 2012, down from 105.1% in 2011. The contribution to the combined ratio of catastrophe losses in 2012 was 7.5 percentage points, compared with 20 percentage points in 2011, Mr. Van Slooten said.
Some 90% of the catastrophe losses recorded in 2012 were from the United States, noted Mr. Van Slooten, with losses from Superstorm Sandy and the U.S. drought and resultant crop-related losses two of the largest contributors.
The contribution of favorable development of prior years' reserves to the combined ratio was 4.3 percentage points in 2012, down from 5 percentage points in 2011.
