CHICAGO, Sept. 11, 2011 /PRNewswire/ -- Aon Benfield, the global reinsurance intermediary and capital advisor of Aon Corporation (NYSE: AON), today releases its Reinsurance Market Outlook – Value Creating Capital report, which reviews major events in the year to date and highlights key considerations for insurers in the approach to the January 1, 2012 reinsurance renewals.
In its analysis of the industry, the 50-page study examines standard predictive pricing variables such as reinsurer and insurer capital, rating agency standards, and actual catastrophe losses. It also contains dedicated commentary on trends in the financial markets, insurance-linked securities (ILS), and mergers and acquisitions, as well as reviewing both catastrophe activity by sector and geography, and the 2011 reinsurance renewal periods.
The report reveals that reinsurers remain well capitalized and have the ability to continue to provide value creating capital to insurers at terms that are accretive to the earnings and capital of insurers. Reinsurers, assuming only modest additional insured catastrophe events in the balance of 2011 are likely to have sufficient capital to meet the demands of insurers globally. The influence of catastrophe model changes and related rating agency capital requirements are not expected to drive new demand for capacity in excess of reinsurers' supply for January 2012 renewals.
For the first time, the Reinsurance Market Outlook contains insured loss estimates from Impact Forecasting – Aon Benfield's wholly owned catastrophe model development center of excellence – for recent events, which reflect the firm's extensive on-the-ground research and analysis.
The figures reveal that the Tohoku earthquake on March 11 is estimated to have resulted in an insured loss of between USD30-40bn (USD15-25bn net of Japanese non-life insurer and government earthquake insurance scheme (JER)) and an economic loss to Japan of USD300bn, while the sum of the New Zealand earthquakes caused approximately USD17bn in insured losses, and economic losses of USD24.8bn.
Insurer and reinsurer capital are both expected to end 2011, in the absence of significant additional catastrophe or other losses, with more capital than they held at year end 2010. Insurer capital is likely to show a more meaningful level of growth than reinsurers in 2011 despite reasonable levels of retained catastrophe losses and continued share repurchases.
Bryon Ehrhart, chairman of Aon Benfield Analytics, said: "Throughout the significant insured catastrophe events of 2011, reinsurance has once again proved its inherent ability to add value as an earnings and capital protection tool. Reinsurers provide value creating capital to insurers that desire efficient capital structures to support risk taking at competitive and accretive terms. There is still plenty of opportunity for insurance and reinsurance partners to collaborate, innovate, add more value to insureds and profit together."
To view the full Value Creating Capital report, please follow the link below:
About Aon Benfield
Aon Benfield, a division of Aon Corporation (NYSE: AON), is the world's leading reinsurance intermediary and full-service capital advisor. We empower our clients to better understand, manage and transfer risk through innovative solutions and personalized access to all forms of global reinsurance capital across treaty, facultative and capital markets. As a trusted advocate, we deliver local reach to the world's markets, an unparalleled investment in innovative analytics, including catastrophe management, actuarial and rating agency advisory. Through our professionals' expertise and experience, we advise clients in making optimal capital choices that will empower results and improve operational effectiveness for their business. With more than 80 offices in 50 countries, our worldwide client base has access to the broadest portfolio of integrated capital solutions and services. To learn how Aon Benfield helps empower results, please visit aonbenfield.com.
Aon Corporation (NYSE: AON) is the leading global provider of risk management services, insurance and reinsurance brokerage, and human resources solutions and outsourcing. Through its more than 60,000 colleagues worldwide, Aon unites to deliver distinctive client value via innovative and effective risk management and workforce productivity solutions. Aon's industry-leading global resources and technical expertise are delivered locally in over 120 countries. Named the world's best broker by Euromoney magazine's 2008, 2009 and 2010 Insurance Survey, Aon also ranked highest on Business Insurance's listing of the world's insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues in 2008 and 2009. A.M. Best deemed Aon the number one insurance broker based on revenues in 2007, 2008 and 2009, and Aon was voted best insurance intermediary 2007-2010, best reinsurance intermediary 2006-2010, best captives manager 2009-2010, and best employee benefits consulting firm 2007-2009 by the readers of Business Insurance. Visit http://www.aon.com for more information on Aon and http://www.aon.com/manchesterunited to learn about Aon's global partnership and shirt sponsorship with Manchester United.
SOURCE Aon Corporation