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Largest loss-affected reinsurance programs have yet to renew: Aon Benfield

Largest loss-affected reinsurance programs have yet to renew: Aon Benfield

The “unusual combination” of catastrophic losses in 2011 and in 2010 has not led insurers affected by the events to buy higher reinsurance limits, seek more capital, raise prices or decrease their exposure “materially” for their products, according to a report issued Wednesday by Aon Benfield Analytics.

But “Reinsurance Market Outlook: Value Creating Capital,” also noted that the largest loss-affected programs have not yet renewed this year. The report said insurers and governments hit by last year's catastrophic losses could increase the size of their reinsurance programs when they renew this spring.

“It is also likely that larger global insurers will again find value in protecting large corporate catastrophe protections in regions where significant earnings events may occur,” Aon Benfield said in the analysis. “The capital available from traditional reinsurers and investors in catastrophe-related products” provides “sufficient capacity to meet this potential new demand.”

The report also said that “reinsurance and risk-transfer securities markets have the strength, capacity, creativity and credibility to support value-building insurers in 2012.”

Aon Benfield reiterated that it no longer makes its reinsurance renewal market results or reinsurance market outlook public.

In September, the unit of Chicago-based Aon Corp. said despite catastrophe losses, the global reinsurance market remained adequately capitalized.