London, The Aon Benfield Aggregate (ABA) analyses the financial results of 30 leading traditional global reinsurers. Today’s new report covers the first half of 2010 and reveals thatshareholders’ funds grew by 12% in the period to stand at USD235 billion. Excluding new capital issued shareholders’ funds were broadly unchanged as net income and investment gains were offset by capital returned to shareholders in the form of share buy-backs and dividends as well as negative exchange fluctuations. Pre-tax profit rose 65% to USD15 billion. Realized gains boosted an otherwise stable investment return, which more than offset a break-even underwriting performance. Excluding capital gains, operating income fell by 36%. The excess levels of reinsurance capacity continued to exert downward pressure on rates. Reinsurers reported rate decreases of 3% to 5% on a global basis, despite an above average incidence of large catastrophe losses. Other key findings include:
- Premium income was flat. The positive effect of acquisitions was broadly neutralized by lower premium rates and disciplined underwriting.
- Increased catastrophe losses and higher underwriting expenses resulted in the combined ratio for the Aon Benfield Aggregate (ABA) increasing by 8.2 percentage points (pp) to 100.0% for the first half of 2010.
- Shareholders’ funds growth was 12% for the six months ended June 30, 2010. During this period, ABA companies repurchased USD5.1 billion of their own shares, equivalent to 2.4% of opening shareholders’ funds.
- At USD837 billion, total invested assets decreased by 1% from year end 2009. The composition of the invested assets portfolio has changed marginally from December 31, 2009, reflecting recovery in equity valuations and a renewed appetite for riskier investments.
- Pre-tax profit rose 65% to USD15 billion in the first half of 2010, while operating income fell by 36% (excluding capital gains).
The full report: www.aon.com/attachments/reinsurance/201009_aba_h1_2010.pdf
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