Despite many insurers suffering operating losses in 2011, excess capital remains throughout the industry—and analyst firm Keefe, Bruyette & Woods (KBW) says it's likely that insurers will maintain that capital for 2012 growth opportunities rather than return it to shareholders. 

In its latest “P&C Monthly Deductible” report, KBW says more than one-third of the insurers it covers reported operating losses for 2011. However, total capital declined by just 0.5 percent to $232.2 billion at Q4 2011 compared to 2010's fourth quarter. 

Debt-to-total capital also only increased modestly, KBW says, despite more than $15.3 billion of capital returned to shareholders, global catastrophes and weak earnings throughout the year. 

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