Fitch Report: Reinsurers’ First-Quarter 2011 Financial Results

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings today has published a special report analyzing first quarter 2011 financial results for a group of 23 property/casualty (re)insurers with significant reinsurance operations.

The global reinsurance industry's financial performance was profoundly affected by international natural catastrophe-related losses during first-quarter 2011, with the quarterly group aggregate combined ratio increasing to 138% from 103% one year ago.

However, Fitch believes that the across the group 2% decline in GAAP equity from year-end 2010 can be easily absorbed by the reinsurance market, which Fitch viewed as being strongly capitalized at year-end 2010. Nevertheless, a number of entities experienced larger double-digit capital declines, and Fitch recognizes that year-to-date capital erosion leaves less margin for error as the U.S. hurricane season approaches, which has produced many of the largest global catastrophe losses on record.

While demand for reinsurance protection for perils and geographies directly affected by first-quarter catastrophes are nearly certain to spike, Fitch expects that a broader market pricing turn is not likely due to the fact that the reinsurance market remains well capitalized and primary insurers were largely unscathed by first-quarter 2011 catastrophe events.

The report 'Reinsurers' First-Quarter 2011 Financial Results' dated May 18, 2011, is available at 'www.fitchratings.com' under the following headers:

Sectors >> Insurance >> Research >> Special Reports

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Non-Life Insurance Rating Methodology', March 31, 2011;

--'Insurance Rating Methodology', March 31, 2011.

Applicable Criteria and Related Research: Reinsurers' First-Quarter 2011 Financial Results

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=629689

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Fitch RatingsBrian C. Schneider, CPA, CPCU, ARe, +1-312-606-2321
Senior Director
or
Fitch, Inc.
70 West Madison Street
Chicago, IL 60602
orGregory W. Dickerson, +1-212-908-0220
Director
or
Media Relations:Brian Bertsch, New York, +1 212-908-0549
brian.bertsch@fitchratings.com

Source: Fitch Ratings