Reinsurers return to positive capital

Reinsurers have started to rebuild their capital, according to reinsurance broker Guy Carpenter. As measured by the broker’s Global Reinsurance Composite, reinsurers’ capital rose by $4.6bn in the first half of this year, a significant improvement from a loss of $3.5bn in the corresponding period last year. Unrealised investment losses declined sharply, to $1.5bn, from $11.7bn in the first six months of last year. Meanwhile, realised investment losses declined by 43% to $1.2bn during that time. Underwriting earnings amounted to $2.2bn during the first half of this year, up by 9.6% from the corresponding period last year. Overall, the combined ratio improved to 84.9% from 85.6%, but the aggregate combined ratio for European reinsurers was 94.7%, while for Bermudian companies it was 77.1%. The latter, which have relatively catastrophe-heavy portfolios, benefitted from a more or less benign loss year. Reinsurers’ gross premium rose by 6% to $71bn in the first six months of this year, while net premium rose by a similar 6% to $65bn.