Reinsurers hit hard by capital market turmoil

Primary insurers shouldered the bulk of substantial catastrophe losses in H1 2008

A continued erosion of reinsurers’ profitability in the second quarter of the year is indicated by the results of the companies that have reported so far (see page 5 for tables). They are being squeezed by shrinking premium volumes on the one hand and, more severely, by the convulsions in capital markets on the other. Reserve releases and reductions in capital through share repurchases are only partially compensating.