The Aon Benfield Aggregate

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The Aon Benfield Aggregate Results for the year ended December 31, 2013

Empower ResultsTM

Contents Global Reinsurer Capital

3

Executive Summary

4

ABA Capital

5

Capital Development

5

Capital Management

7

Premium Income Earnings

8 12

Underwriting Performance

13

Investment Results

15

Net Income

15

Return on Equity

16

ABA Business Model Evolution

19

Who Are The New Investors?

19

How Is New Money Being Deployed?

19

Implications for ‘Traditional’ Reinsurers

19

Convergence in Action

19

ABA Valuation

21

Financial Strength Ratings

23

Appendix 1: ABA Data

24

About Aon Benfield Aon Benfield, a division of Aon plc, 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

Global Reinsurer Capital Aon Benfield estimates that global reinsurer capital totaled USD540 billion at December 31, 2013, an increase of 7% relative to December 31, 2012. This calculation is a broad measure of capital available for insurers to trade risk with and includes both traditional and alternative forms of reinsurer capital. Exhibit 1: Global Reinsurer Capital 600

Traditional

Alternative

470

500

USD (billions)

410

400

400

505

455

7% 11%

-3% 18%

340 18%

-17%

300 200

540

Global Reinsurer Capital

388 321

447

428

378

466

490

100 0

22

19

22

24

28

39

50

FY 2007

FY 2008

FY 2009

FY 2010

FY 2011

FY 2012

FY 2013

Source: Company reports, Aon Benfield Analytics

Major insurers and reinsurers generally maintained their solid operating performance during 2013, aided by economic recovery in the United States, exposure growth in emerging markets and below average insured catastrophe losses. However, the support to reported capital positions was muted by unrealized losses on bond portfolios, driven by rising interest rates associated with ‘tapering’ of the Federal Reserve’s quantitative easing program. The involvement of capital market investors in the reinsurance sector through non-equity participations continues to expand, presenting a growing challenge to ‘traditional’ reinsurer business models.

A NOTE OF CAUTION ON THE VAGARIES OF INSURANCE ACCOUNTING Accounting choices can influence reported results. There have always been inconsistencies in the methodology applied to the calculation of co