Aon Benfield Analytics has estimated that global reinsurer capital reached a record level of $570 billion at 30 June 2014, an increase of 6 percent ($30 billion) relative to 31 December 2013.
This calculation is a broad measure of capital available for insurers to trade risk with and includes both traditional and non-traditional forms of reinsurance capital.
The firm's latest study has found that capital reported by the Aon Benfield Analytics group of 31 leading reinsurers increased by 4 percent ($14 billion) to $351 billion (62 percent of global reinsurer capital), driven primarily by $18.6 billion of net income and $9.4 billion of unrealised capital gains.
The main offset was $14.3 billion of dividends and share buybacks.
Gross property and casualty premiums also rose by 4 percent to $109 billion, with growth split evenly between insurance and reinsurance business.
The combined ratio rose by 0.4 percentage points to 90.3 percent, with property and casualty underwriting profit unchanged at $7.9 billion.
Catastrophe losses declined relative to the prior year and were well below the long-term average.
According to Aon, net catastrophe exposures are also on the decline as risk transfer to the capital markets increases via sidecars, insurance-linked securities and more cost effective retrocession cover.
Mike Van Slooten, head of Aon Benfield's International Market Analysis team, said: "The influx of alternative capital is lowering risk transfer costs for both insurers and reinsurers, creating a win-win situation that should drive market expansion in the medium-term.”
“Aon Benfield has made major advances in its analysis of reinsurers' financial performance in recent years, in response to growing insurer demand for strategic insight into longer-term industry trends.”
