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Global reinsurance capital down 3% after 2011 catastrophes

Major catastrophe losses shaved three percent from total worldwide reinsurer capital last year according to a new study just released.

The Aon Benfield Aggregate report, which analyses the year-end financial position of the world’s leading reinsurers, estimated that total global reinsurer capital was down to $455 billion as of the end of 2011, down from $470 billion exactly one year earlier. The second, third and fourth quarters each saw capital growth of one percent after a reduction of six percent in the first quarter.

The reported shareholders’ funds of the 28 largest reinsurers in the world reached an all-time high of $251 billion at the end of 2011 — an increase of 1.7 percent or $4.2 billion from the end of 2010. A reduction of 3.4 percent in the first quarter was outweighed by growth of 1.7 percent, 1.1 percent and 2.3 percent in the three subsequent quarters.

Overall growth in capital was driven by a handful of larger companies, notably, Swiss Re, Hannover Re and Ace.

Meanwhile, gross property/casualty (p/c) premiums written by those reinsurers rose by 11.4 percent to $136 billion in 2011. Some of the rise was contributed to significant catastrophe activity and the associated reinstatement premiums.

Bermuda-based Maiden grew its p/c gross written premiums (GWP) by nearly 40 percent year on year to just over $1.8 billion. Alterra’s full-year GWP hit $1.9 billion up $494.9 million over 2010. But, according to the report, the majority of these increases in GWP are attributable to acquisitions rather than increased business.

RenaissanceRe also saw a significant increase in GWP — up 23.1 percent from 2010 to $1.4 billion. Much of RenRe’s increase is attributed to $160.1 million of reinstatement premiums following catastrophes.

“The reinsurance sector remains strong after a testing year in 2011,” said Mike Van Slooten, head of Aon Benfield’s International Market Analysis team. “It continues to provide very efficient underwriting capital to insurers.”

Growing company: Ace was one of the main contriibutors to the growth in global reinsurance industry capital

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Published April 17, 2012 at 9:36 am (Updated April 17, 2012 at 9:35 am)

Global reinsurance capital down 3% after 2011 catastrophes

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