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The Aon Benfield AggregateSix Months Ended June 30, 2011
ContentsGlobal Reinsurer Capital 3
Executive Summary 4
Aon Benfield Aggregate Capital 5
Capital Development 5Capital Management 7
Premium Income 8Premium Distribution 9
Earnings 10Underwriting Performance 10Investment Results 12Return on Equity 13
Ratings 15
Appendix 1: Aon Benfield Aggregate Data 16
About Aon BenfieldAon 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 Benfield
3
Global Reinsurer Capital Aon Benfield estimates that global reinsurer capital totaled USD445 billion at June
30, 2011, an increase of 1% from March 31, 2011, but a reduction of 5% from the
end of 2010. This calculation is a broad measure of capital available for reinsurance
and includes both traditional and non-traditional forms of reinsurance capital.
Exhibit 1: Global Reinsurer Capital
Source: Company reports, Aon Benfield Analytics
411
342
402
470445
300
400
500
FY 2007 FY 2008 FY 2009 FY 2010 1H 2011
USD
(bill
ions
)
-17%18%
17%
-5%
The Aon Benfield Aggregate – Six Months Ended June 30, 2011
4
Executive Summary Global reinsurer capital totaled USD445 billion at June 30, 2011, a reduction of 5% from USD470 billion at December 31, 2010. Growth of 1% was observed in the second quarter, after a reduction of 6% in the first.
At June 30, 2011, the reported shareholders’ funds of the 28 companies forming the ABA totaled USD242 billion, a reduction of 1.7% or USD4.2 billion since the end of 2010. Half of the capital lost in the first quarter was recovered in the second.
The ABA reported net income of USD1.2 billion for the first half of 2011, a gain of USD5.4 billion in the second quarter more than offsetting a loss of USD4.2 billion in the first.
As well as the contribution from net income, ABA capital benefitted from USD0.8 billion of new issuance and USD2.4 billion of foreign exchange gains. However, these positive factors were more than offset by USD9.6 billion of dividends and share buybacks.
Gross property and casualty (P&C) premiums written by the ABA totaled USD74.4 billion in the first half of 2011, an increase of 10.5%. A number of the larger constituents reported appreciable underlying growth but acquisitions and reinstatement premiums also contributed to the gain.
The ABA combined ratio increased from 99.7% to 120.6%, driven by a USD12.8 billion increase in net catastrophe losses to USD18.2 billion.
The total investment return fell by 12% to USD18.5 billion, due to the continued effect of low interest rates and a marked reduction in realized and unrealized losses.
Overall, the ABA reported a pre-tax profit of USD0.8 billion for the first half of 2011, a 95% reduction relative to the comparative period in 2010.
Despite the elevated level of catastrophe losses over the last 18 months, financial strength ratings have remained broadly unchanged, reflecting continued robust capital positions.
Aon Benfield
5
Aon Benfield Aggregate Capital At June 30, 2011 the reported shareholders’ funds of the 28 reinsurers forming the
ABA totaled USD242.4 billion. This represented a decline of 1.7% or USD4.2 billion
from the end of 2010, with half of the reduction in the first quarter being recovered
in the second quarter.
Exhibit 2: ABA Shareholders’ Funds
Source: Company reports, Aon Benfield Market Analysis
Capital Development Dividends totaling USD7.1 billion and share buybacks totaling USD2.5 billion were the main drivers of the overall reduction in capital in the first half of 2011. Net income across the ABA totaled USD1.2 billion, despite USD18.2 billion of net catastrophe losses. Other positive contributors were USD0.8 billion of new capital (mainly preferred shares issued by Endurance, Montpelier Re and PartnerRe) and USD2.4 billion of foreign exchange gains.
Exhibit 3: ABA Shareholders’ Funds Development
Source: Company reports, Aon Benfield Market Analysis
-2%
100
150
200
250
FY 2007 FY 2008 FY 2009 FY 2010 1H 2011
USD
(b
illio
ns) -19% 28%
18%
246.6 0.81.2 -7.1
2.4 0.2 -2.50.7 242.4
230
240
250
FY 2010SHF
Additionalcapital
Netincome
Dividends FX Investmentgains
Sharebuybacks
Other 1H 2011SHF
USD
(bill
ions
)
The Aon Benfield Aggregate – Six Months Ended June 30, 2011
6
Among the ABA constituents, only ACE reported capital growth of any note in the first half of 2011. Most reported a decline, driven by the impact of catastrophe losses on earnings, as well as dividend payments and share buybacks. Capital management was particularly active at Ariel and Endurance, as shown in Exhibit 6.
Exhibit 4: Movement in Reported Shareholders’ Funds
Source: Company reports, Aon Benfield Market Analysis
The chart below plots the reported losses from catastrophe events in the first half of 2011 (mainly pre-tax and net of reinsurance and reinstatement premiums) against shareholders’ funds held at the end of 2010.
Exhibit 5: Catastrophe Losses as % of 2010 Shareholders’ Funds
Source: Company reports, Aon Benfield Market Analysis
-25%
-20%
-15%
-10%
-5%
0%
5%
10%ABA
27%
17% 17%16% 15% 14% 14%
12% 12% 12% 11% 10% 9% 9% 9% 8%7% 6% 6% 6% 5%
4% 4%2% 2% 1%
0%
5%
10%
15%
20%
25%
30% Australian events
New Zealand earthquake II
Japan earthquake
2Q movement in 1Q losses
2Q catastrophes (primarily US tornadoes)
Aon Benfield
7
Capital Management The ABA companies returned USD9.6 billion, or 3.9% of opening capital, to investors in the first half of 2011 in the form of dividends and share buybacks. This compares with USD9.1 billion, or 4.4%, in the first half of 2010. Dividends were boosted by a USD2 billion payout from Burlington Northern Santa Fe Railway, which was up-streamed to Berkshire Hathaway via National Indemnity. Share buybacks halved, with activity heavily curtailed in the wake of the first quarter earthquakes.
Exhibit 6: Capital Management
Company
Reporting
Currency
(millions)
Opening
SHF
(FY 2010)
1H 2011
Buybacks
Buybacks
as % of
Opening
SHF
Dividends
paid
1H 2011
Dividends
as % of
Opening
SHF
Total
Capital
Returned
ACE USD 22,974 0 0% 113 0% 113
Allied World USD 3,076 114 4% 0 0% 114
Alterra USD 2,918 144 5% 25 1% 169
American Agricultural USD 494 0 0% 1 0% 1
Arch USD 4,513 274 6% 13 0% 287
Argo USD 1,626 21 1% 7 0% 28
Ariel USD 1,545 0 0% 349 23% 349
Aspen USD 3,241 2 0% 33 1% 34
Axis USD 5,625 15 0% 80 1% 95
Endurance USD 2,848 341 12% 32 1% 373
Everest Re USD 6,284 38 1% 52 1% 90
Fairfax USD 8,633 21 0% 232 3% 254
Flagstone USD 1,135 0 0% 0 0% 0
Gen Re USD 9,319 0 0% 550 6% 550
Hannover Re EUR 4,509 0 0% 277 6% 277
Maiden USD 750 0 0% 10 1% 10
Montpelier Re USD 1,629 63 4% 15 1% 77
Munich Re EUR 22,783 323 1% 1,110 5% 1,433
National Indemnity USD 68,437 0 0% 2,000 3% 2,000
PartnerRe USD 7,207 227 3% 95 1% 322
Platinum USD 1,895 82 4% 6 0% 88
RenaissanceRe USD 3,936 175 4% 44 1% 220
SCOR EUR 4,345 0 0% 201 5% 201
Swiss Re USD 25,342 209 1% 1,035 4% 1,244
Transatlantic USD 4,284 0 0% 26 1% 26
Validus USD 3,505 6 0% 55 2% 61
White Mountains USD 3,653 93 3% 8 0% 101
XL USD 9,611 259 3% 69 1% 327
ABA USD 246,634 2,535 1% 7,081 3% 9,616
Source: Company reports, Aon Benfield Market Analysis
The Aon Benfield Aggregate – Six Months Ended June 30, 2011
8
Premium Income Gross property and casualty (P&C) premiums written by the ABA in the first half of
2011 totaled USD74.4 billion, an increase of 10.5% relative to the same period in
2010. In addition to acquisitions and reinstatement premiums, appreciable
underlying growth was reported at a number of the larger ABA constituents.
Exhibit 7: ABA Gross Premiums Written
Source: Company reports, Aon Benfield Market Analysis
The ten largest ABA constituents expanded gross written premiums by 13% in the period, while the remainder grew by 4%. On a constant currency basis, Munich Re, Swiss Re and Hannover Re experienced growth rates of 13%, 16% and 10%, respectively, driven largely by solvency-relief deals in Asia and increased demand for natural catastrophe cover in loss-affected areas. Acquisitions influenced premium development at Alterra (Harbor Point), Maiden (GMAC International) and Fairfax (Zenith National/First Mercury).
Exhibit 8: P&C Gross Premiums Written, Percentage Change
Source: Company reports, Aon Benfield Market Analysis
-6.3% 10.5%
20
30
40
50
60
70
80
1H 2009 1H 2010 1H 2011
USD
(bill
ions
)
-30%-20%-10%
0%10%20%30%40%50%60%
ABA
Aon Benfield
9
Premium Distribution Net P&C premiums written increased by 12.0% to USD62.7 billion in the first half. The companies represented in the top ten remained unchanged, with their share of the total increasing from 71.9% to 73.9%. XL and National Indemnity swapped places, while Fairfax, SCOR and Axis rose above PartnerRe.
Exhibit 9: Distribution of P&C Net Premiums Written
Source: Company reports, Aon Benfield Market Analysis
1H 2011 P&C Net Premiums WrittenUSD 62.7 billion
Munich Re 17.9%
Swiss Re 12.9%
ACE 10.4%
Hannover Re 7.1%
NICO 5.3%
XL 4.8%
Fairfax 4.6%
SCOR 3.9%
Axis 3.6%
PartnerRe 3.4%
Remainder 26.1%
The Aon Benfield Aggregate – Six Months Ended June 30, 2011
10
Earnings The ABA reported pre-tax profits of USD0.8 billion for the first half of 2011, down
95% over the comparative period in 2010. Net catastrophe losses totaled USD18.2
billion, driving the overall underwriting result to a deficit of USD11.0 billion. The
total investment return fell by 12%, primarily reflecting lower levels of capital gains.
Exhibit 10: ABA Pre-Tax Result
Source: Company reports, Aon Benfield Market Analysis
The distribution of the pre-tax result across the ABA constituents is shown in Exhibit 11. The gains at National Indemnity and Gen Re were largely driven by dividend payments from subsidiaries. Most companies reported losses, the largest in dollar terms being incurred by Munich Re and PartnerRe.
Exhibit 11: Pre-Tax Profit/Loss (USD millions)
Source: Company reports, Aon Benfield Market Analysis
Underwriting Performance The ABA reported a combined ratio of 120.6% for the first half of 2011, up from 99.7% in the prior year. The deterioration was driven by an increase in the level of catastrophe losses from USD5.4 billion to USD18.2 billion. Attritional claims showed a marked improvement. In the aggregate, prior year reserve releases continue to provide significant, albeit weakening, support to reported results.
14.7
0.8
-20-15-10-505
10152025
1H 2010 1H 2011
USD
(bill
ions
)
Other Capital gains/losses Life underwriting resultNon-life underwriting result Investment income Pre-tax profit
-1,000
-600
-200
200
600
1,000
1,400
1,800
Aon Benfield
11
Exhibit 12: ABA Combined Ratio Composition
Source: Company reports, Aon Benfield Market Analysis
The combined ratios of the ABA constituents are shown in Exhibit 13. All but two companies reported underwriting losses for the first half of 2011.
Exhibit 13: Reported Combined Ratios
Source: Company reports, Aon Benfield Market Analysis
The impact of catastrophe losses on reported combined ratios in the first half of 2011 is shown in Exhibit 14. The results range from 126.6% in the case of specialist underwriter RenRe, to 1.3% in the case of Maiden Holdings.
Exhibit 14: Combined Ratio Impact of Catastrophe Losses
Source: Company reports, Aon Benfield Market Analysis
64.1% 61.4%
10.9%34.1%
29.7%
29.9%
-5.0% -4.8%
99.7%
120.6%
-10%
40%
90%
140%
1H 2010 1H 2011
Attritional loss ratio Catastrophe losses Expense ratio Prior year reserve adjustment
0%20%40%60%80%
100%120%140%160%180% Loss ratio Expense ratio ABA combined ratio
127%
92%81%
76%68%
47% 44% 43% 43% 41% 40% 36% 35% 32% 29% 29% 27% 25% 21% 21% 19% 18% 18% 18%9%
1%0%
20%
40%
60%
80%
100%
120%
140%Australian events
New Zealand earthquake II
Japan earthquake
2Q movement in 1Q losses
2Q catastrophes (primarily US tornadoes)
The Aon Benfield Aggregate – Six Months Ended June 30, 2011
12
In dollar terms, prior year reserve releases increased marginally to USD2.6bn in the first half of 2011, although this result was heavily influenced by a USD0.5bn contribution from Swiss Re. Numerous short-tail underwriters continue to derive significant earnings benefit from this source.
Exhibit 15: Loss Reserve Adjustment as % of Net Premium Earned
Source: Company reports, Aon Benfield Market Analysis
Investment Results ABA invested assets increased by 4.9% to USD929 billion during the first half of 2011. Overall asset allocation was broadly unchanged.
Exhibit 16: Invested Assets Portfolio
Source: Company reports, Aon Benfield Market Analysis
The total investment return fell by 12% to USD18.5 billion, equating to a yield of 2.0%, down from 2.5% in the first half of 2010. Net investment income rose by 13% to USD17.3 billion. Realized and unrealized capital gains reported through income statements fell by 80% to USD1.2 billion.
-5%
0%
5%
10%
15%
20%
25%
30%ABA
63%12%
5%
20%
ABA Invested Assets December 31, 2010 USD885 billion
Fixed income securities Equities Cash Other
62%12%
6%
20%
ABA Invested Assets June 30, 2011 USD929 billion
Aon Benfield
13
Exhibit 17: Total Investment Return
Source: Company reports, Aon Benfield Market Analysis
In view of the planned participation of private creditors in a second rescue package for Greece, Munich Re wrote down its holdings in Greek government debt to market value at June 30, 2011. This generated costs of EUR703 million and a burden of EUR125 million on the consolidated result. These securities are mainly held at ERGO, the group’s primary insurance operation, with much of the investment risk passed to policyholders. The other ABA companies have very little direct exposure to sovereign debt issued by peripheral European Union countries.
Exhibit 18: Reinsurer Exposure at June 30, 2011
Company
Reporting Currency
(millions) Portugal Italy Ireland Greece Spain Total
As % of
SHF
Hannover Re EUR 30 27 31 0 166 254 5.9%
Munich Re EUR 768 5,377 1,536 768 2,305 10,754 53.6%
SCOR EUR 0 0 0 0 0 0 0.0%
Swiss Re USD 33 4 6 0 35 78 0.3%
Source: Company reports, Aon Benfield Market Analysis
Return on Equity Quarterly net income for the ABA from the beginning of 2010 is shown in Exhibit 19. The result returned to a more normal level in the second quarter of 2011, after the heavy impact of catastrophe events earlier in the year.
Exhibit 19: ABA Net Income
Source: Company reports, Aon Benfield Market Analysis
0%
1%
2%
3%
4%
5%
6%
7%ABA
5.4 6.5 6.94.6
-4.2
5.4
-5
-3
-1
1
3
5
7
9
1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011
USD
(bill
ions
)
The Aon Benfield Aggregate – Six Months Ended June 30, 2011
14
The net results reported by the ABA companies for the first half of 2011 are shown in Exhibit 20. Munich Re benefitted from a significant tax recovery, leaving PartnerRe as an outlier.
Exhibit 20: Net Income / Loss (USD millions)
Source: Company reports, Aon Benfield Market Analysis
The ABA reported a return on equity1 of 0.5% for the first half of 2011, a reduction from 5.4% in the prior year period. The distribution across the ABA constituents is shown in Exhibit 21.
Exhibit 21: Return on Average Common Equity (Net Income)
Source: Company reports, Aon Benfield Market Analysis
1 Return on equity is calculated as net income available to common shareholders as a percentage of the average of common equity at December 31, 2010 and June 30, 2011.
-1,000
-500
0
500
1,000
1,500
2,000
-20%
-15%
-10%
-5%
0%
5%
10%ABA
Aon Benfield
15
Ratings Exhibit 22: Ratings
Main Operating Company A.M. Best Fitch Moody’s Standard & Poor’s
ACE Bermuda Insurance Ltd A+* Stable AA-* Stable Aa3 Stable AA- Stable
Allied World Assurance Co Ltd A Stable NR - A2 Review ( ) A Watch Pos
Alterra Bermuda Ltd A Negative A* Stable A3 Stable A- Positive
American Agricultural Insurance Co A- Stable NR - NR - -
Arch Reinsurance Ltd A Positive A+ Stable A2 Positive A+ Stable
Argo Re Ltd A* Stable NR - NR - NR -
Ariel Reinsurance Company Ltd A-* Stable NR - NR - A- Stable
Aspen Insurance Ltd A Stable NR - A2 Stable A Stable
AXIS Specialty Ltd A Stable A+ Stable A2 Stable A+ Stable
Endurance Specialty Insurance Ltd A Stable A* Stable A2 Stable A Stable
Everest Reinsurance (Bermuda) Ltd A+* Stable AA-* Stable Aa3* Stable A+* Stable
Flagstone Reassurance Suisse SA A-* Negative A-* Negative A3 Review ( ) NR -
General Reinsurance Corporation A++* Stable AA+* Stable Aa1 Stable AA+ Negative
Hannover Rückversicherungs AG A Positive A+* Stable NR - AA-* Stable
Maiden Insurance Company Ltd A-* Stable NR - NR - BBB+ Stable
Montpelier Reinsurance Ltd A-* Positive A-* Positive NR - A- Stable
Munich Reinsurance Co A+ Stable AA-* Stable Aa3* Stable AA- Stable
National Indemnity Company A++* Stable AA+* Stable Aa1 Stable AA+ Negative
Odyssey Reinsurance Company A Stable A-* Stable A3 Positive A- Stable
Partner Reinsurance Co Ltd A+* Stable AA- Stable Aa3* Negative AA-* Negative
Platinum Underwriters Bermuda Ltd A* Stable A* Stable NR - A* Negative
Renaissance Reinsurance Ltd A+* Stable A+* Stable A1 Stable AA-* Stable
SCOR Global P&C SE A* Stable A* Positive A2 Positive A* Positive
Sirius International Insurance Corp A Stable A- Stable A3 Stable A- Stable
Swiss Reinsurance Co A Positive NR - A1* Stable A+ Positive
Transatlantic Reinsurance Co A Stable NR - A1* Stable A+ Stable
Validus Reinsurance Ltd A- Positive A- Stable A3 Stable A- Stable
XL Re Ltd A Stable A* Stable A2 Stable A Stable
* Ratings affirmed since Japan EQ
Rating/outlook changes since Japan EQ
Ratings as at August 2011
Source: A.M. Best, Fitch, Moody’s, Standard & Poor’s
The Aon Benfield Aggregate – Six Months Ended June 30, 2011
16
Appendix 1: Aon Benfield Aggregate Data Exhibit 23: 1H 2011 Results
Company
Reporting
Currency
(millions)
P&C Gross
Premiums
Written
1H 2010
P&C Gross
Premiums
Written
1H 2011 Change
P&C Net
Premiums
Written
1H 2010
P&C Net
Premiums
Written
1H 2011 Change
ACE USD 9,156 9,177 0% 6,215 6,531 5%
Allied World USD 998 1,080 8% 803 877 9%
Alterra USD 768 1,190 55% 536 917 71%
American Agricultural USD 449 512 14% 149 142 -5%
Arch USD 1,771 1,877 6% 1,392 1,471 6%
Argo USD 840 755 -10% 601 511 -11%
Ariel USD 479 437 -9% 409 390 -5%
Aspen USD 1,248 1,254 0% 1,119 1,035 -7%
Axis USD 2,365 2,595 10% 2,033 2,251 11%
Endurance USD 1,308 1,503 15% 1,154 1,241 8%
Everest Re USD 2,035 2,053 1% 1,918 1,975 3%
Fairfax USD 2,659 3,427 29% 2,197 2,889 32%
Flagstone USD 770 769 0% 618 546 -12%
Gen Re USD 619 519 -16% 312 262 -16%
Hannover Re EUR 3,272 3,544 8% 2,948 3,190 8%
Maiden USD 662 933 41% 624 886 42%
Montpelier Re USD 474 471 -1% 458 421 -8%
Munich Re* EUR 7,480 8,281 11% 6,968 8,007 15%
National Indemnity USD 2,839 3,686 30% 2,584 3,351 30%
PartnerRe USD 2,692 2,231 -17% 2,546 2,119 -17%
Platinum USD 415 355 -14% 399 321 -20%
RenaissanceRe USD 1,023 1,252 22% 736 881 20%
SCOR EUR 1,764 1,944 10% 1,622 1,743 7%
Swiss Re USD 8,562 10,265 20% 6,615 8,100 22%
Transatlantic USD 2,096 2,157 3% 1,974 2,040 3%
Validus USD 1,388 1,455 5% 1,229 1,213 -1%
White Mountains USD 1,687 1,287 -24% 1,264 1,112 -12%
XL USD 3,429 3,862 13% 2,711 3,020 11%
ABA USD 67,392 74,443 10.5% 55,953 62,679 12.0%
*P&C reinsurance segment only
Source: Company reports, Aon Benfield Market Analysis
Aon Benfield
17
Exhibit 23: 1H 2011 Results (cont’d)
Calendar Year
Company
Loss
Ratio
1H 2010
Loss
Ratio
1H 2011
Expense
Ratio
1H 2010
Expense
Ratio
1H 2011
Combined
Ratio
1H 2010
Combined
Ratio
1H 2011 Change
ACE 60.3% 67.8% 30.9% 30.6% 91.2% 98.4% 7.2pp
Allied World 62.1% 78.3% 31.0% 31.3% 93.1% 109.6% 16.5pp
Alterra 58.6% 70.9% 27.6% 32.7% 86.2% 103.5% 17.4pp
American Agricultural 83.2% 134.0% 16.5% 14.8% 99.7% 148.8% 49.1pp
Arch 61.2% 72.5% 32.2% 32.3% 93.4% 104.8% 11.4pp
Argo 66.0% 87.3% 37.8% 39.3% 103.8% 126.6% 22.8pp
Ariel 62.0% 64.6% 36.7% 38.0% 98.7% 102.6% 3.9pp
Aspen 69.2% 93.8% 29.2% 32.8% 98.4% 126.6% 28.2pp
Axis 60.9% 97.3% 31.2% 31.8% 92.1% 129.1% 37.0pp
Endurance 64.0% 87.9% 29.9% 30.5% 93.8% 118.4% 24.6pp
Everest Re 80.9% 96.8% 27.6% 27.5% 108.5% 124.3% 15.8pp
Fairfax 75.4% 82.8% 29.8% 31.5% 105.2% 114.2% 9.1pp
Flagstone 62.2% 110.2% 38.4% 34.4% 100.6% 144.6% 44.0pp
Gen Re 56.3% 100.3% 40.0% 18.8% 96.2% 119.1% 22.9pp
Hannover Re 74.3% 85.4% 25.3% 24.9% 99.5% 110.3% 10.8pp
Maiden 63.1% 65.4% 33.6% 33.0% 96.7% 98.4% 1.7pp
Montpelier Re 61.2% 110.8% 31.5% 31.6% 92.7% 142.3% 49.6pp
Munich Re* 76.8% 103.5% 29.6% 29.6% 106.4% 133.1% 26.7pp
National Indemnity 56.1% 108.7% 31.0% 32.7% 87.2% 141.4% 54.2pp
PartnerRe 73.9% 118.0% 29.9% 29.1% 103.8% 147.1% 43.3pp
Platinum 57.3% 134.8% 26.9% 26.3% 84.2% 161.1% 76.9pp
RenaissanceRe 17.0% 149.2% 28.8% 24.9% 45.8% 174.1% 128.4pp
SCOR 74.5% 84.4% 27.9% 28.7% 102.5% 113.1% 10.7pp
Swiss Re 78.1% 90.4% 27.8% 28.9% 105.9% 119.4% 13.5pp
Transatlantic 73.1% 96.8% 28.7% 26.9% 101.8% 123.7% 21.9pp
Validus 75.2% 79.9% 30.1% 33.3% 105.3% 113.2% 7.9pp
White Mountains 72.5% 67.7% 34.3% 35.5% 106.8% 103.2% -3.6pp
XL 66.1% 78.8% 30.3% 31.3% 96.4% 110.1% 13.7pp
ABA 70.0% 90.7% 29.7% 29.9% 99.7% 120.6% 20.9pp
*P&C reinsurance segment only
Source: Company reports, Aon Benfield Market Analysis
The Aon Benfield Aggregate – Six Months Ended June 30, 2011
18
Exhibit 23: 1H 2011 Results (cont’d)
Accident Year
Company
Prior Year
Reserve
Adjustment
1H 2010
Prior Year
Reserve
Adjustment
1H 2011
Prior Year
Reserve
Adjustment
as % of NPE
1H 2010
Prior Year
Reserve
Adjustment
as % of NPE
1H 2011
Accident
Year
Combined
Ratio
1H 2010
Accident
Year
Combined
Ratio
1H 2011 Change
ACE -245 -239 4.3% 3.8% 95.4% 102.2% 6.8pp
Allied World -138 -100 20.4% 14.4% 113.5% 124.0% 10.5pp
Alterra -41 -79 8.5% 10.8% 94.7% 114.4% 19.7pp
American Agricultural -18 -15 10.0% 9.5% 109.7% 158.3% 48.6pp
Arch -70 -117 5.4% 9.2% 98.8% 113.9% 15.2pp
Argo -20 4 3.1% -0.7% 107.0% 125.9% 18.9pp
Ariel -9 -30 3.1% 11.3% 101.8% 113.9% 12.1pp
Aspen -15 -55 1.6% 6.0% 99.9% 132.5% 32.6pp
Axis -160 -101 11.2% 6.2% 103.3% 135.4% 32.1pp
Endurance -68 -93 8.3% 10.8% 102.1% 129.1% 27.0pp
Everest Re -20 -3 1.1% 0.1% 109.6% 124.5% 14.9pp
Fairfax -51 -64 2.3% 2.4% 107.5% 116.7% 9.2pp
Flagstone -21 -4 4.6% 0.8% 105.2% 145.5% 40.3pp
Gen Re -70 -78 21.8% 28.3% 118.0% 147.4% 29.4pp
Hannover Re -140 -165 5.3% 5.8% 104.8% 116.1% 11.3pp
Maiden 0 0 0.0% 0.0% 96.7% 98.4% 1.7pp
Montpelier Re -64 -53 20.7% 16.7% 113.4% 159.1% 45.6pp
Munich Re* 0 0 0.0% 0.0% 106.4% 133.1% 26.7pp
National Indemnity -491 -39 22.7% 1.6% 109.8% 142.9% 33.1pp
PartnerRe -214 -303 11.1% 17.0% 114.9% 164.1% 49.1pp
Platinum -90 -49 21.8% 13.9% 106.0% 175.0% 69.0pp
RenaissanceRe -193 -89 41.6% 17.0% 87.3% 191.1% 103.8pp
SCOR 0 -23 0.0% 1.4% 102.5% 114.5% 12.1pp
Swiss Re 0 -492 0.0% 9.3% 105.9% 128.7% 22.8pp
Transatlantic -22 -28 1.1% 1.4% 103.0% 125.2% 22.2pp
Validus -76 -52 8.5% 6.1% 113.8% 119.3% 5.5pp
White Mountains -38 -28 2.9% 2.8% 109.7% 106.0% -3.7pp
XL -169 -199 6.8% 7.7% 103.3% 117.8% 14.6pp
ABA -2,483 -2,570 5.0% 4.8% 104.7% 125.4% 20.7pp
*P&C reinsurance segment only
Figures in reporting currencies, but converted to USD (millions) for ABA line
Source: Company reports, Aon Benfield Market Analysis
Aon Benfield
19
Exhibit 23: 1H 2011 Results (cont’d)
Company
Net
Investment
Income
1H 2010
Net
Investment
Income
1H 2011
Capital
Gains/
Losses
1H 2010
Capital
Gains/
Losses
1H 2011
Total
Investment
Return
1H 2010
Total
Investment
Return
1H 2011 Change
ACE 1,022 1,113 177 -118 1,199 995 -17%
Allied World 134 103 172 109 307 212 -31%
Alterra 102 117 -9 -26 93 91 -1%
American Agricultural 9 8 1 3 9 11 18%
Arch 184 175 133 97 316 272 -14%
Argo 67 66 20 34 86 100 16%
Ariel 33 24 27 4 60 29 -53%
Aspen 117 114 18 -7 135 107 -21%
Axis 187 211 41 68 228 278 22%
Endurance 90 92 4 3 94 95 1%
Everest Re 327 337 12 11 339 349 3%
Fairfax 377 378 569 18 946 396 -58%
Flagstone 16 23 -3 3 13 26 103%
Gen Re 640 767 2 5 642 772 20%
Hannover Re 565 577 -14 96 551 673 22%
Maiden 36 39 1 1 37 40 6%
Montpelier Re 39 35 30 29 69 64 -7%
Munich Re 3,727 3,634 1,351 -166 5,078 3,468 -32%
National Indemnity 1,491 3,136 2,032 230 3,523 3,365 -4%
PartnerRe 348 310 191 -34 539 276 -49%
Platinum 73 66 31 -8 104 58 -44%
RenaissanceRe 92 94 117 30 209 123 -41%
SCOR 284 269 60 76 344 345 0%
Swiss Re 2,839 2,919 363 643 3,202 3,562 11%
Transatlantic 228 226 6 53 235 280 19%
Validus 69 56 81 24 150 80 -47%
White Mountains 109 95 93 77 202 172 -15%
XL 589 551 -138 -83 451 468 4%
ABA 15,308 17,349 5,831 1,173 21,138 18,522 -12%
Figures in reporting currencies, but converted to USD (millions) for ABA line
Source: Company reports, Aon Benfield Market Analysis
The Aon Benfield Aggregate – Six Months Ended June 30, 2011
20
Exhibit 23: 1H 2011 Results (cont’d)
Company
Pre-tax
Profit/Loss
1H 2010
Pre-tax
Profit/Loss
1H 2011 Change
Pre-tax
Operating ROE*
1H 2010
Pre-tax
Operating ROE*
1H 2011 Change
ACE 1,698 1,085 -36% 7.4% 5.1% -2.3pp
Allied World 332 116 -65% 4.8% 0.2% -4.6pp
Alterra 144 -21 -115% 6.8% 0.2% -6.7pp
American Agricultural 8 -67 -990% 1.4% -15.0% -16.3pp
Arch 469 122 -74% 7.7% 0.6% -7.2pp
Argo 66 -65 -199% 2.8% -6.2% -9.1pp
Ariel 66 40 -40% 2.4% 2.6% 0.1pp
Aspen 141 -157 -211% 3.7% -4.7% -8.4pp
Axis 353 -260 -174% 5.7% -6.0% -11.7pp
Endurance 115 -66 -158% 3.9% -2.5% -6.4pp
Everest Re 151 -201 233% 2.3% -3.4% -5.7pp
Fairfax 586 -328 -156% 0.2% -4.1% -4.3pp
Flagstone 38 -185 -587% 3.1% -17.4% -20.5pp
Gen Re 654 715 9% 6.7% 7.7% 0.9pp
Hannover Re 452 197 -56% 10.3% 2.0% -8.3pp
Maiden 33 -3 -110% 4.6% -0.5% -5.1pp
Montpelier Re 79 -82 -203% 2.9% -6.8% -9.8pp
Munich Re 1,639 -680 -141% 1.3% -2.4% -3.6pp
National Indemnity 3,796 1,630 -57% 3.5% 2.1% -1.5pp
PartnerRe 312 -659 -311% 1.6% -9.0% -10.7pp
Platinum 148 -177 -220% 5.6% -9.4% -15.0pp
RenaissanceRe 455 -271 -160% 7.4% -6.8% -14.2pp
SCOR 158 21 -87% 2.4% -1.3% -3.7pp
Swiss Re 1,463 556 -62% 4.5% -0.3% -4.8pp
Transatlantic 150 -226 -251% 3.5% -6.6% -10.1pp
Validus 65 -63 198% -0.4% -2.5% -2.0pp
White Mountains -20 0 99% -2.7% -1.8% 0.9pp
XL 412 26 -117% 5.5% 0.1% -5.4pp
ABA 14,747 809 -95% 4.0% -0.1% -4.1pp
*Calculated by excluding the impact of net realized and unrealized investment gains/losses
Figures in reporting currencies, but converted to USD (millions) for ABA line
Source: Company reports, Aon Benfield Market Analysis
Aon Benfield
21
Exhibit 23: 1H 2011 Results (cont’d)
Company
Net Income
1H 2010
Net Income
1H 2011 Change
Return on
Equity*
1H 2010
Return on
Equity*
1H 2011 Change
ACE 1,432 866 -40% 7.0% 3.7% -3.3pp
Allied World 318 102 -68% 9.5% 3.3% -6.2pp
Alterra 140 -14 -110% 6.2% -0.5% -6.7pp
American Agricultural 8 -65 -870% 1.6% -14.9% -16.5pp
Arch 448 111 -75% 10.7% 2.7% -8.0pp
Argo 47 -72 -253% 2.9% -4.5% -7.4pp
Ariel 61 36 -41% 3.9% 2.6% -1.3pp
Aspen 116 -153 -232% 3.7% -5.4% -9.1pp
Axis 317 -283 -189% 6.3% -5.7% -12.0pp
Endurance 107 -55 -152% 3.8% -2.0% -5.8pp
Everest Re 134 -185 -238% 2.2% -3.0% -5.2pp
Fairfax 432 -184 -142% 5.9% -2.4% -8.3pp
Flagstone 45 -181 -505% 3.7% -17.4% -21.2pp
Gen Re 539 664 23% 5.6% 7.2% 1.6pp
Hannover Re 310 218 -30% 7.8% 4.9% -2.9pp
Maiden 32 -5 -116% 4.6% -0.7% -5.3pp
Montpelier Re 80 -83 -205% 4.8% -5.4% -10.1pp
Munich Re 1,191 -211 -118% 5.2% -1.0% -6.2pp
National Indemnity 3,264 1,554 -52% 6.6% 2.3% -4.3pp
PartnerRe 253 -700 -377% 3.6% -10.5% -14.1pp
Platinum 140 -178 -227% 6.7% -9.9% -16.6pp
RenaissanceRe 375 -223 -159% 11.9% -7.0% -18.9pp
SCOR 156 40 -74% 3.9% 1.0% -2.9pp
Swiss Re 970 295 -70% 4.1% 1.2% -2.9pp
Transatlantic 126 -109 -186% 3.1% -2.6% -5.7pp
Validus 61 -62 -202% 1.6% -1.8% -3.4pp
White Mountains -37 -17 -56% -1.0% -0.5% 0.6pp
XL 320 -2 -101% 3.2% 0.0% -3.2pp
ABA 11,974 1,124 -90.6% 5.4% 0.5% -5.0pp
*Net income available to common shareholders as a percentage of the average of common equity at December 31, 2010 and June 30, 2011.
Figures in reporting currencies, but converted to USD (millions) for ABA line
Source: Company reports, Aon Benfield Market Analysis
The Aon Benfield Aggregate – Six Months Ended June 30, 2011
22
Exhibit 23: 1H 2011 Results (cont’d)
Company
Cash and
Investments
FY 2010
Cash and
Investments
1H 2011 Change
Shareholders’
Funds
FY 2010
Shareholders’
Funds
1H 2011 Change
ACE 54,555 58,506 7% 22,974 24,113 5%
Allied World 8,077 8,350 3% 3,076 3,044 -1%
Alterra 7,937 8,024 1% 2,918 2,793 -4%
American Agricultural 906 819 -10% 494 446 -10%
Arch 12,237 12,577 3% 4,513 4,441 -2%
Argo 4,332 4,381 1% 1,626 1,549 -5%
Ariel 2,252 2,056 -9% 1,545 1,237 -20%
Aspen 7,355 7,545 3% 3,241 3,105 -4%
Axis 12,666 13,382 6% 5,625 5,333 -5%
Endurance 6,280 6,560 4% 2,848 2,670 -6%
Everest Re 15,894 16,332 3% 6,284 6,153 -2%
Fairfax 23,487 24,397 4% 8,633 8,245 -4%
Flagstone 2,039 1,882 -8% 1,135 947 -17%
Gen Re 14,024 13,841 -1% 9,319 9,182 -1%
Hannover Re 38,058 37,526 -1% 4,509 4,325 -4%
Maiden 2,401 2,494 4% 750 759 1%
Montpelier Re 2,808 2,965 6% 1,629 1,620 -1%
Munich Re 184,149 181,405 -1% 22,783 20,058 -12%
National Indemnity 104,826 112,839 8% 68,437 68,163 0%
PartnerRe 19,320 19,971 3% 7,207 6,632 -8%
Platinum 4,328 4,379 1% 1,895 1,696 -11%
RenaissanceRe 6,413 6,069 -5% 3,936 3,515 -11%
SCOR 20,956 19,783 -6% 4,345 4,002 -8%
Swiss Re 184,306 190,841 4% 25,342 24,818 -2%
Transatlantic 13,408 14,005 4% 4,284 4,234 -1%
Validus 5,796 6,206 7% 3,505 3,408 -3%
White Mountains 9,743 8,634 -11% 3,653 3,621 -1%
XL 35,800 36,454 2% 9,611 9,626 0%
ABA 885,164 928,845 5% 246,634 242,411 -1.7%
Figures in reporting currencies, but converted to USD (millions) for ABA line
Source: Company reports, Aon Benfield Market Analysis
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Eleanore Obst [email protected]
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