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Reinsurer capital hits record high

Reinsurers’ profitability improved last year and their capital holdings reached a record high as pension funds and other investors entered the catastrophe bond market.

The Aon Benfield Aggregate report, analysing 31 reinsurers’ results, shows gross property and casualty premiums grew 5% to $US199 billion ($211.78 billion) due to US economic recovery, growth in emerging markets and company acquisitions.

Pre-tax profits increased 6% to $US38.1 billion ($40.55 billion), while global reinsurer capital gained 7% to $US540 billion ($574.68 billion).

The companies’ collective combined operating ratio improved by 2.8 percentage points to 89.6% and catastrophe losses fell 38% to $US7.9 billion ($8.41 billion).

Reinsurers kept their investment income stable despite their combined yield falling 30 basis points to 3.1%.