Aon Benfield, the global reinsurance intermediary and capital advisor of Aon has estimated that global reinsurer capital totalled $540 billion at 31 December 2013, an increase of 7 percent ($35 billion) over the year.
This calculation is a broad measure of capital available for insurers to trade risk with and includes both traditional and alternative forms of reinsurance capital.
The firm's latest study found that capital reported by the Aon Benfield Aggregate (ABA) group of 31 leading reinsurers increased by 6 percent ($20 billion) to $337 billion, driven primarily by $34 billion of net income.
Repatriation of equity capital in the form of dividends and share buybacks rose by 15 percent to $20 billion, partly reflecting the increasing engagement of third party capital.
Gross property and casualty (P&C) insurance and reinsurance premiums written by the ABA rose by 5 percent to $199 billion, driven by acquisition effects and exposure growth in emerging markets.
Disclosed catastrophe losses fell by 38 percent in 2013 to USD7.9 billion, contributing 4.7 percentage points to the combined ratio.
Mike Van Slooten, head of Aon Benfield’s International Market Analysis team, said: "Reinsurers have reported resilient results in an increasingly competitive marketplace.”
“Most are now adapting their business models to accommodate the increasing availability of lower cost capital, thereby enhancing both their risk transfer capabilities and their offering to clients. We expect capital management activity to accelerate, as the advantages become more apparent.”
