London
20 April 2017
Reporter: Becky Butcher

Capital supporting reinsurance continues to grow


Aggregate shareholders’ funds for companies making up the Willis Re index increased by 4 percent to $344.1 billion in 2016, according to a Willis report.

The Reinsurance Market Report revealed that, taking into account capital from alternative markets and a pro-rata share of capital from insurance groups where reinsurance makes up more than 10 percent of their total premium, the revised figure for 2016 is $449 billion, an increase of $22 billion on the previous year.

The report also found that aggregate net income for companies making up the Willis Re index reduced to $26.6 billion from $30.3 billion, resulting in a reduction of the headline return on equity of 8 percent, down from 9.3 percent at the end of 2015.

It suggested that, in the face of testing market conditions, reinsurers have continued to actively manage their capital through dividends and share buy-backs, which totalled $16.4 billion for the Willis Re index.

John Cavanagh, global CEO of Willis Re, said: “The continued challenging conditions of the market further impacts pressure on margins. However, buyers can take comfort from the fact that the market balance sheet and headline figures remain robust in the face of persistent market softening due to continued reasonable net income and measured capital management strategies.”

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