Highlights from the first half study of the the 28 large insurers that make up the Aon Benfield Aggregate:
- Global reinsurer capital totaled US$445B at June 30. That’s 5% less than at year-end but 1% higher than at Q1.That number includes shareholder funds and non-traditional forms of capital. Shareholders funds fell 1.7% in the first half, to US$242B.
- First-half net income was US$1.2B, with Q2’s gain of $5.4B offsetting Q1 losses of $4.2B.
- The big drain on capital was $9.6B of dividends and share buybacks. The chart nicely shows how they drove the fall in shareholder funds, with $7.1B in dividends and $2.5B in buybacks. Pretty good evidence of an overcapitalized industry.
- GWP rose to $74.4B, 10.5% more than the year-ago period. This was partly growth, but acquisitions and reinstatement premiums played roles, too.
- CR rose to 120.6% from 99.7% a year ago, mainly because cat losses rose to $18.2B from $5.4B a year ago.
- Investment returns fell by 12%, to $18.5B, thanks to low interest rates. Capital gains, both realized and unrealized, were meager.
- First half profits were $0.8B, 95% lower than a year earlier.
- Despite the lackluster results, financial strength ratings were mainly unchanged.
Full report here.