Aon Benfield, the global reinsurance intermediary and capital advisor of Aon Corporation, is highlighting how reinsurance supported Australian and New Zealand insurers after its 2010 and 2011 catastrophic events with nearly two-thirds of the losses being reinsured.
Speaking today at the 12th Biennial Aon Benfield Hazards Conference in Australia, Malcolm Steingold, Chief Executive Officer, Asia Pacific for Aon Benfield will explain how, despite the losses, capacity from global reinsurers remains strong for business in the Australia and New Zealand region.
Insured loss estimates from Impact Forecasting, Aon Benfield’s wholly owned catastrophe modeling firm, reveal that insurers faced a combined loss of AUD25.6 billion from the Queensland floods, Cyclone Yasi, the Perth hailstorm and the New Zealand earthquakes. In turn, excellent risk and capital management decisions have allowed insurers to recoup an estimated $16 billion from reinsurers.
According to the firm, following significant catastrophe loss activity over the past 12 to 18 months, the renewal of reinsurance programs at 1 July 2011 was orderly. While pricing in the region was higher at renewal, insurers continued to find the capacity they required at terms and conditions that remained lower than their cost of capital and accretive to earnings.
Mr. Steingold added: “The insurance industry performed as intended and drew upon its significant capital resources to protect insurer balance sheets and earnings so that insurers could continue to help their customers rebuild homes and businesses. The reinsurance market has proved effective and continues to serve insurers in the region. It is clear that the negative impact on consumers and businesses from these recent losses has been lessened because of the role reinsurers played in assuming losses from the region’s insurers."