RVS Live: Over-capitalized insurance industry at odds with environment of global under-insurance

The United States is one of the most insured countries in the world and yet, in 2016, almost 50% of the economic losses sustained from natural disasters remained unprotected, Aon's Reinsurance Market Outlook report launched in Monte Carlo shows.

The report which assesses the key drivers of reinsurance supply and demand in the approach to the January 1 renewals finds that a significant proportion of the unprecedented flood losses generated by Hurricane Harvey in Texas and Louisiana will be uninsured, again highlighting the existence of a global protection gap. As a result, those affected will require substantial financial support from the United States government.

Besides the US situation, much of the rest of the world remains chronically under-insured, at a time when the frequency of severe weather events is increasing, shows the report.

Meanwhile, the first half of 2017 saw a renewed surge of capital into the reinsurance sector, raising the total capital available to a record level of USD 605 billion at June 30, 2017, according to Aon Benfield figures.

Eric ANDERSEN, Chief Executive Officer of Aon Benfield, said: "Hurricane Harvey has had devastating consequences and unfortunately many of the losses are uninsured, leaving the United States government, and therefore taxpayers, to pick up most of the bill. At the same time, we have an 'over-capitalized' reinsurance industry and new investors actively seeking access to diversified insurance risk. The frequency of severe weather-related losses is increasing and there needs to be a significant step-up in the efforts made to address the protection gap evident globally."

The Reinsurance Market Outlook report reveals that major reinsurers continued to produce solid results in the first half of 2017, driven by a relatively benign loss environment and stabilized investment returns. It also highlights the competitive impact of a surge in alternative capital at the mid-year renewals.

Based on preliminary figures, and prior to the impact of Hurricane Harvey, insured losses for the first eight months of 2017 totaled USD 24.5 billion, representing 56% of the 10-year average for the period. The reinsured component of these losses was low, given that a high proportion related to localized severe weather events in the United States.

The Reinsurance Market Outlook - September 2017 report is available here
About Aon

Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.

Related articles

JLT Re appoints Jeremy FOX as Asia-Pacific CEO

Global reinsurance broker JLT Re announced the appointment of Jeremy FOX to the position of Chief Executive Officer (CEO) of JLT Re's Asia-Pacific unit (APAC). He will also become a member of the Reinsurance Global Executive Committee.

2018-01-17

SAVA Re adds new member of the management board

Slovenian re/insurer SAVA Re annoucend that the appointment of Polona Pirs ZUPANCIC as member of the management board has got the Insurance Supervision Agency's (ISA) approval. She started her term of office on 14 January 2018.

2018-01-17

WTW appoints Patrick MURPHY as Global Head of Cargo & Specie

Willis Towers Watson (WTW) has appointed Patrick MURPHY as Global Head of Cargo and Specie, within its Marine, Corporate Risk and Broking Division. He will be responsible for client management, technical, placement and risk management specialists to support WTW marine clients in risk mitigation.

2018-01-11

ON THE MOVE

JLT Re appoints Jeremy FOX as Asia-Pacific CEO

Global reinsurance broker JLT Re announced the appointment of Jeremy FOX to the position of Chief Executive Officer (CEO) of JLT Re's Asia-Pacific unit (APAC). He will also become a member of the Reinsurance Global Executive Committee.

SAVA Re adds new member of the management board

Slovenian re/insurer SAVA Re annoucend that the appointment of Polona Pirs ZUPANCIC as member of the management board has got the Insurance Supervision Agency's (ISA) approval. She started her term of office on 14 January 2018.

TOP EVENT

"Insurance and Pensions reloaded" - the 7th EIOPA Annual Conference

The 7th EIOPA Annual Conference takes place today in Frankfurt am Main, Germany. A review of the current supervisory covergence issues and of the prospects of the Pan European Personal Pension Product are on the event's agenda, together with analyzing the ways in which regulation may enable innovation.

22.11.2017

photodune-3834701-laughing-girl-xs

"IIF2017 - Insurance in the DIGITAL World" Conference took place in Vienna

"IIF2017 - Insurance in the DIGITAL World" conference brought together in Vienna well-known insurance professionals from all over the world who analyzed the latest digital trends in the industry, taking into account the fast digitalization of the financial services providers' world, in particular in the insurance field, which is creating both huge opportunities and strong challenges for the players.

14.11.2017

photodune-3834701-laughing-girl-xs

Croatian Insurance Days Live

On 9 November has started in Opatija, Croatia, the 2017 edition of the Croatian Insurance Days Conference, the traditional meeting of the Croatian insurance top professionals with their European peers. XPRIMM Publications are supporting the event as Media Partners.

09.11.2017

photodune-3834701-laughing-girl-xs

The 2017 Baden Baden Meeting: Short recap

The Baden-Baden meeting, one of the key events in the reinsurance calendar, has just set the final point of this year's edition. XPRIMM Publications have reported from the meeting's premises. Let's recap!

26.10.2017

Baden Baden Headlines 3: CEE insurance markets are attractive for reinsurers

Central and Eastern Europe insurance markets are an important source of business for Lloyds, total premium income from this region increasing by EUR 64 million since 2010, pointed out the Lloyd's representative in a seminar dedicated to CEE insurance markets: "We are seeing strong growth from Czech Rep, Poland, Slovakia and Ukraine. At the same time are some contractions from Russia, Bulgaria, Romania and Hungary due to challenging trading conditions as political implications and other sanctions".

25.10.2017

Baden Baden Headlines 2: cyber insurance market set to grow under regulatory presure; nat cat events more frequent, but losses per event are decreasing

Asian insurance market, especially the Indian market - are considered to be "the new El-Dorado" of the global re/insurance market, with rapidly expanding markets and an dynamic environment: "Indian P&C re/insurance markets are expected to grow at a pace of 15% per annum", according  to Victor PEIGNET, CEO, Global P&C, SCOR SE. The French -based reinsurer setted-up its Indian branch in 2016, after the authorisation from the local market authority - IRDAI. India's re/insurance market has become more attractive for global companies following the relaxation of regulatory requirements, and lately, "big names" in the industry entered the market by opening branches: GEN Re, SCOR, Lloyd's of London, MUNICH Re, SWISS Re, Reinsurance Group of America (RGA), HANNOVER Re, XL Catlin and others.

24.10.2017

See all