2Q Reinsurer Capital Increases 1% Despite Losses, Down 5% for Year

NU Online News Service, Sept. 8, 11:56 a.m. EST

Reinsurance capital increased one percent in the 2011 second quarter after taking a 6 percent drop in the first quarter of this year, according to a report from Aon Benfield.

The Aon Benfield Aggregate report of 28 reinsurers says global reinsurer capital collectively rose $5 billion in the second quarter of this year from the first quarter's $440 billion.

Reinsurer capital stood at $470 billion at the end of 2010 and is down 5 percent for the first half of the year.

“Despite the elevated level of catastrophe losses over the past 18 months, financial-strength ratings have remained broadly unchanged, reflecting continued robust capital positions,” says Mike Van Slooten, international head of Aon Benfield's analytics' international market analysis team in a statement.

The reinsurers report net catastrophe losses totaling $18.2 billion, producing a combined ratio of 120.6 percent, up from 99.7 from the prior year.

The report notes that “prior-year reserve releases continue to provide significant, albeit weakening, support to reported results.”

The report says net income for the group stands at $1.2 billion for the first half of the year, a gain of $5.4 billion in the second quarter which offset a first-quarter loss of $4.2 billion.

Pre-tax profit for the group stood at $800 million for the first half of 2011, down 95 percent from the $14.75 billion reported for the same period last year.

Gross property and casualty premiums written by the group totaled $74.4 billion for the first half of 2011, an increase of 10.5 percent over the same period last year.