The Aon Benfield Aggregate

7 downloads 501 Views 663KB Size Report
Appendix 1: Aon Benfield Aggregate Data ... investment income and the capital market recovery effect seen in the prior y
The Aon Benfield Aggregate Three Months Ended March 31, 2011

Contents Global Reinsurer Capital



Executive Summary



Aon Benfield Aggregate Capital



Capital Development



Capital Management

7  8 

Premium Income



Premium Distribution Earnings

10 

Underwriting Performance

10 

Investment Results

12 

Return on Equity

13 

Ratings

15 

Appendix 1: Aon Benfield Aggregate Data

16 

About Aon Benfield As the industry leader in treaty, facultative and capital markets, Aon Benfield is redefining the role of the reinsurance intermediary and capital advisor. Through our unmatched talent and industry-leading proprietary tools and products, we help our clients to redefine success. Aon Benfield offers unbiased capital advice and customized access to more reinsurance and capital markets than anyone else. As a trusted advocate, we provide local reach to the world’s markets, an unparalleled investment in innovative analytics, including catastrophe management, actuarial, and rating agency advisory, and the right professionals to advise clients in making the optimal capital choice for their business. With an international network of more than 80 offices in 50 countries, our worldwide client base is able to access the broadest portfolio of integrated capital solutions and services. Learn more at aonbenfield.com.

Aon Benfield

Global Reinsurer Capital Aon Benfield estimates that Global Reinsurer Capital totaled USD440 billion at March 31, 2011, a reduction of 6% from the end of 2010. This calculation is a broad measure of capital available for reinsurance and includes both traditional and nontraditional forms of reinsurance capital. Exhibit 1: Global Reinsurer Capital 500 -6%

USD (billions)

17%

-17%

18%

400 470 440 411

402 342

300 FY 2007

FY 2008

FY 2009

FY 2010

1Q 2011

Source: Company reports, Aon Benfield Analytics

3

The Aon Benfield Aggregate – Three Months Ended March 31, 2011

Executive Summary Global Reinsurer Capital fell by 6.4% to USD440 billion during the first quarter of 2011, principally driven by the level of insured catastrophe losses. This calculation is a broad measure of capital available for reinsurance underwriting and includes both traditional and non-traditional forms of reinsurance capital. At March 31, 2011, the reported shareholders’ funds of the 28 reinsurers forming the ABA totaled USD238.3 billion, a decline of 3.4% in the quarter. The principal drivers were USD4.3 billion of net losses, USD2.5 billion of unrealized investment losses, USD2.0 billion of dividend payments and USD2.0 billion of share buy-backs. Gross property and casualty premiums written by the ABA in the first quarter totaled USD40.3 billion, an increase of 7.1% relative to the same period in 2010. The volume of reinsurance business rose by 7.7% to USD29.3 billion. Acquisitions and reinstatement premiums more than offset the effect of generally lower pricing. The ABA reported an aggregate pre-tax loss of USD5.7 billion for the quarter. The non-life underwriting deficit stood at USD11.5 billion, driven by USD15.1 billion of catastrophe losses. Low yields continued to hamper investment income and the capital market recovery effect seen in the prior year was not repeated. The first quarter combined ratio rose by 38.3 percentage points to 143.7%, with catastrophe losses representing 57.1% of net premiums earned, up from 19.7% in the first quarter of 2010. Prior year reserve releases declined 9.2% to USD1.2 billion, a beneficial impact of 4.7 percentage points. The ABA’s total investment return fell by 30.3% to USD9.0 billion, a yield of 1.0% compared to 1.5% in the first quarter of 2010. Net investment income increased by 11.9% to USD8.5 billion, while realized and unrealized capital gains reported through income statements fell by 91.4% to USD0.5 billion. The net loss of USD4.3 billion reported by the ABA for the first quarter of 2011 represented a negative return on average common equity of 1.8%. This followed a return of 10.4% or USD23.5 billion for the whole of 2010. Strong capital positions have enabled the vast majority of ABA companies to absorb substantial catastrophe losses over the last 18 months without consequent rating action. However, the underlying operating environment remains challenging.

4

Aon Benfield

Aon Benfield Aggregate Capital At March 31, 2011, the reported shareholders’ funds of the 28 reinsurers forming the ABA totaled USD238.3 billion, a decline of 3.4% in the quarter. Excluding share buy-backs and dividend payments, the reduction was 1.8%. Exhibit 2: ABA Shareholders’ Funds 250 -3%

18%

USD (billions)

200

28%

-19%

150

100 FY 2007

FY 2008

FY 2009

FY 2010

1Q 2011

Source: Company reports, Aon Benfield Market Analysis

Capital Development Although the ABA companies reported USD15.1 billion of net catastrophe losses in the first quarter of 2011, the aggregate post tax deficit was confined to USD4.3 billion. For comparative purposes, in the first quarter of 2010, the ABA reported USD5.4 billion of net income after USD4.9 billion of net catastrophe losses. The other drivers of the overall capital reduction were USD2.5 billion of unrealized investment losses, USD2.0 billion of dividends and USD2.0 billion of share buy-backs. Foreign exchange gains of USD1.8 billion provided a partial offset. Exhibit 3: ABA Shareholders’ Funds Development 250

USD (billions)

246.6

0.1

-4.2 -2.0

1.8

-2.5 -2.0

240

0.5

238.3

Other

1Q 2011 SHF

230 FY 2010 SHF

Additional capital

Net income

Dividends

FX

Investment gains

Share buybacks

Source: Company reports, Aon Benfield Market Analysis

5

The Aon Benfield Aggregate – Three Months Ended March 31, 2011

A handful of companies with relatively low net exposure to the catastrophe events were able to report modest capital growth in the quarter, most notably ACE. At the other end of the spectrum, shareholders’ funds at Ariel and Endurance fell by 21% and 15%, respectively. However, these movements mainly resulted from active capital management (as shown in Exhibit 6), whereas the other sizeable capital reductions were primarily driven by catastrophe losses. Exhibit 4: Movement in Reported Shareholders’ Funds 5%

ABA

0% -5% -10% -15% -20% -25%

Source: Company reports, Aon Benfield Market Analysis

Exhibit 5 plots the first quarter pre-tax net incurred catastrophe losses reported at March 31, 2011 against shareholders’ funds held at the end of 2010. The results range from 21.4% (Flagstone) to 1.4% (National Indemnity). Exhibit 5: Catastrophe Losses as % of 2010 Shareholders’ Funds 25% Japan earthquake 20% 15% 10% 5% 0%

Source: Company reports, Aon Benfield Market Analysis

6

New Zealand earthquake II Australian events

Aon Benfield

Capital Management Share buy-backs and dividend payments reduced ABA shareholders’ funds by 1.6% or USD4.0 billion in the first quarter. The most notable activity was the release of a USD349 million dividend at Ariel (a similar payment of USD420 million was made in 1Q 2010) and a USD322 million buy-out of Perry Corporation at Endurance. Exhibit 6: Capital Management

Company

Reporting

SHF at

1Q 2011

1Q 2011

Total

Capital

Currency

December

share

dividends

capital

returned

(millions)

31, 2010

buy-backs

paid

returned

as % of SHF

ACE

USD

22,974

0

113

113

0.5%

Allied World

USD

3,076

114

0

114

3.7%

Alterra

USD

2,918

137

13

150

5.1%

AAIC

USD

494

0

0

0

0.0%

Arch

USD

4,513

237

6

244

5.4%

Argo

USD

1,626

18

3

22

1.3%

Ariel

USD

1,545

0

349

349

22.6%

Aspen

USD

3,241

2

16

18

0.6%

Axis

USD

5,625

15

40

55

1.0%

Endurance

USD

2,848

341

16

357

12.5%

Everest Re

USD

6,284

38

26

64

1.0%

Fairfax

USD

8,633

0

219

219

2.5%

Flagstone

USD

1,135

0

3

3

0.2%

Gen Re

USD

9,319

0

0

0

0.0%

Hannover Re

EUR

4,509

0

0

0

0.0%

Maiden

USD

750

0

5

5

0.7%

Montpelier Re

USD

1,629

47

6

54

3.3%

Munich Re

EUR

22,783

286

0

286

1.3%

NICO

USD

68,437

0

1,000

1,000

1.5%

PartnerRe

USD

7,207

227

46

272

3.8%

Platinum

USD

1,895

34

3

37

1.9%

RenRe

USD

3,936

175

22

197

5.0%

SCOR

EUR

4,345

0

0

0

0.0%

Swiss Re

USD

25,342

10

0

10

0.0%

Transatlantic

USD

4,284

0

13

13

0.3%

Validus

USD

3,505

0

27

27

0.8%

White Mountains

USD

3,653

86

8

94

2.6%

XL

USD

9,611

167

34

201

2.1%

ABA

USD

246,634

2,039

1,969

4,008

1.6%

Source: Company reports, Aon Benfield Market Analysis

Share buy-back activity has ceased in the wake of the recent earthquakes and is expected to remain dormant pending the outcome of the Atlantic hurricane season. Significant authorizations remain in place. Montpelier Re, Endurance and PartnerRe have issued respectively USD150 million, USD230 million and USD325 million of preferred shares for general corporate purposes.

7

The Aon Benfield Aggregate – Three Months Ended March 31, 2011

Premium Income Gross property and casualty (P&C) premiums written by the ABA in the first quarter totaled USD40.3 billion, an increase of 7.1% relative to the same period in 2010. The volume of reinsurance business rose by 7.7% to USD29.3 billion. Acquisitions and reinstatement premiums more than offset the effect of generally lower pricing. Exhibit 7: ABA First Quarter Gross Premiums Written 40

7.1%

-4.1%

USD (billions)

35 30 25 20 1Q 2009

1Q 2010

1Q 2011

Source: Company reports, Aon Benfield Market Analysis

Alterra’s growth primarily reflects the inclusion of Harbor Point; on a pro forma basis gross premiums decreased 7%. Acquisitions influenced the expansion at Maiden (GMAC International) and Fairfax (Zenith National and First Mercury). The top line at National Indemnity increased by 42%, reflecting increased volume from the Swiss Re quota share. Growth at Endurance was driven by agriculture insurance and renewals on Glacier Re’s former book. Excluding reinstatement premiums, growth at RenRe stood at only 1.6%, driven by the Lloyd’s segment. Exhibit 8: P&C Gross Premiums Written, % Change 80%

ABA

60% 40% 20% 0% -20% -40%

Source: Company reports, Aon Benfield Market Analysis

The notable premium reduction at PartnerRe reflected repositioning of the book following the integration of Paris Re, while Gen Re, Platinum, Argo and Montpelier Re cut volumes in the face of weakening pricing. The top line at White Mountains was affected by the sale of OneBeacon’s personal lines business.

8

Aon Benfield

Premium Distribution Net P&C premiums written by the ABA increased by 7.8% to USD34.2 billion in the first quarter. The top ten constituents have not changed year on year, but SCOR and PartnerRe slipped one and four places respectively, while National Indemnity and Fairfax moved up two and three places respectively. Exhibit 9: Distribution of P&C Net Premiums Written 1Q 2011 P&C Net Premiums Written USD 34 billion Munich Re 16.9% Swiss Re 14.4% ACE 8.9% Hannover Re 6.8% NICO 6.1% XL 5% Fairfax 4.4% Axis 4.1% PartnerRe 3.7% SCOR 3.4% Remainder 26.3% Source: Company reports, Aon Benfield Market Analysis

The distribution of gross written premium classified as reinsurance is shown in Exhibit 10. Between them, the top three companies represented almost 50% of total volume. Exhibit 10: Distribution of Reinsurance Gross Premiums Written 1Q 2011 Reinsurance Gross Premiums Written USD29 billion Munich Re 20.4% Swiss Re 20.2% Hannover Re 8.2% NICO 7.9% PartnerRe 4.6% SCOR 4.5% Axis 3.8% Transatlantic 3.8% XL 3% Everest Re 2.8% Remainder 20.8% Source: Company reports, Aon Benfield Market Analysis

9

The Aon Benfield Aggregate – Three Months Ended March 31, 2011

Earnings The ABA reported pre and post tax losses of USD5.7 billion and USD4.3 billion respectively for 1Q 2011. The non-life underwriting deficit stood at USD11.5 billion, driven by USD15.1 billion of catastrophe losses. Low yields continued to hamper investment income and there was no repeat of the capital market recovery effect seen in the first quarter of 2010. Exhibit 11: ABA Pre-Tax Results 15

USD (billions)

10 5

6.5

0 -5

-5.7

-10 -15 -20 1Q 2010 Other Non-life underwriting result

Capital gains/losses Investment income

1Q 2011 Life underwriting result Pre-tax profit

Source: Company reports, Aon Benfield Market Analysis

Pre-tax profits at Gen Re and National Indemnity were driven by dividend payments from subsidiaries, while ACE benefitted from a relatively low level of net catastrophe exposure. The majority of ABA companies reported losses for the period, notably Munich Re (EUR1.6 billion), Swiss Re (USD0.9 billion) and PartnerRe (USD0.8 billion). Exhibit 12: Pre-Tax Profit/Loss (USD millions) 600 200 -200 -600 -1,000 -1,400 -1,800 -2,200

Source: Company reports, Aon Benfield Market Analysis

Underwriting Performance On an accident year basis, the ABA combined ratio rose by 37.6 percentage points (pp) to 148.4% in the first quarter of 2011. The deterioration was almost entirely driven by the increased level of catastrophe losses, which represented 57.1% of net premiums earned. Prior year reserve releases had a beneficial impact of 4.7pp and, on a calendar year basis, the ABA combined ratio rose by 38.3pp to 143.7%.

10

Aon Benfield

Exhibit 13: ABA Combined Ratio Composition 143.7% 140%

29.9%

105.4% 90%

29.5%

57.1%

19.7% 40%

-10%

61.6%

61.4%

-5.4% 1Q 2010

-4.7% 1Q 2011

Attritional loss ratio

Catastrophe losses

Expense ratio

Prior year reserve adjustment

Source: Company reports, Aon Benfield Market Analysis

A dozen ABA companies reported combined ratios in excess of 150% in the first quarter. Five incurred catastrophe losses exceeding 100% of net premium earned. Exhibit 14: Reported Combined Ratios 250%

Loss ratio

Expense ratio

ABA combined ratio

200% 150% 100% 50% 0%

Source: Company reports, Aon Benfield Market Analysis

The reported underwriting impact of the Australian flood events and the earthquakes in New Zealand and Japan is shown in Exhibit 15. Exhibit 15: Catastrophe Losses – Impact on Combined Ratio 140%

Australian events

120%

New Zealand earthquake II

100%

Japan earthquake

80% 60% 40% 20% 0%

Source: Company reports, Aon Benfield Market Analysis

11

The Aon Benfield Aggregate – Three Months Ended March 31, 2011

Prior year reserve releases totaled USD1.2 billion in the first quarter, down from USD1.4 billion in the first quarter of 2010. A number of companies continue to derive significant earnings benefit from this source, notably Gen Re, RenRe, Montpelier Re and Platinum. Two companies, Flagstone and Argo, reported a modest degree of adverse reserve development in the quarter. Exhibit 16: Loss Reserve Adjustment as % of Net Premium Earned 35%

ABA

30% 25% 20% 15% 10% 5% 0% -5%

Source: Company reports, Aon Benfield Market Analysis

Investment Results ABA invested assets increased by 2.1% to USD904 billion during the first quarter. There was little change in overall allocation between asset classes. Exhibit 17: Invested Assets Portfolio ABA Invested Assets December 31, 2010 USD885 billion

ABA Invested Assets March 31, 2011 USD904 billion 20%

20%

6%

5%

63%

12%

Fixed income securities

62%

12%

Equities

Cash

Other

Source: Company reports, Aon Benfield Market Analysis

The ABA’s total investment return fell by 30.3% to USD9.0 billion, a yield of 1.0% compared to 1.5% in the first quarter of 2010. Net investment income increased by 11.9% to USD8.5 billion, but actually fell by 8.7% to USD6.9 billion excluding USD1.6 billion of subsidiary dividend payments received by National Indemnity and Gen Re. Realized and unrealized capital gains reported through income statements fell by 91.4% to USD0.5 billion.

12

Aon Benfield

Exhibit 18: Total Investment Return 5%

ABA

4% 3% 2% 1% 0%

Source: Company reports, Aon Benfield Market Analysis

Direct comparison of total investment returns is problematic as financial reporting is not consistent. Most of the ABA companies take only realized gains through the income statement, but some also include unrealized gains. Gen Re’s investment return was heavily influenced by USD567 million of dividend payments received from General Re Life Corporation and General Reinsurance AG.

Return on Equity The ABA reported a net loss of USD4.3 billion for the first quarter of 2011, compared to net income of USD23.5 billion for the whole of 2010. Exhibit 19: ABA Net Income 9

USD (billions)

7 5 3

5.4

6.7

6.8 4.6

1 -1 -4.3

-3 -5 1Q 2010

2Q 2010

3Q 2010

4Q 2010

1Q 2011

Source: Company reports, Aon Benfield Market Analysis

The net results of the ABA constituent companies in the first quarter are plotted in Exhibit 20.

13

The Aon Benfield Aggregate – Three Months Ended March 31, 2011

Exhibit 20: Net Income/Loss (USD millions) 700 500 300 100 -100 -300 -500 -700 -900 -1,100 -1,300

Source: Company reports, Aon Benfield Market Analysis

Overall, the ABA reported a negative return on average common equity of 1.8% in the first quarter. The results by constituent company are shown in Exhibit 21. Exhibit 21: Return on Average Common Equity (Net Income) 10% 5% 0% -5% -10% -15% -20%

Source: Company reports, Aon Benfield Market Analysis

14

ABA

Aon Benfield

Ratings Strong capital positions have enabled the vast majority of ABA companies to absorb substantial catastrophe losses over the last 18 months without consequent rating action. However the difficult operating environment is a source of increasing concern for the rating agencies. Exhibit 22: Ratings Main Operating Company

A.M. Best

Fitch

ACE Bermuda Insurance Ltd

A+

Stable

AA-*

Allied World Assurance Co Ltd

A

Stable

Alterra Bermuda Ltd

A

American Agricultural Insurance Co

Moody’s

Standard & Poor’s

Stable

Aa3

Stable

NR

-

A2

Review ()

A

Review ()

Stable

A*

Stable

A3

Stable

A-

Positive

A

Negative

NR

-

NR

-

Arch Reinsurance Ltd

A

Positive

A+

Stable

A2

Positive

A+

Stable

Argo Re Ltd

A

Stable

NR

-

NR

-

NR

-

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

General Reinsurance Corporation

A++

Stable

Hannover Rückversicherungs AG

A

Maiden Insurance Company Ltd

Ariel Reinsurance Company Ltd

BBBpi

Stable

-

Negative

A3

Review ()

NR

-

AA+*

Stable

Aa1

Stable

AA+

Stable

Positive

A+*

Stable

NR

-

AA-

Stable

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

A++*

Stable

AA+*

Stable

Aa1

Stable

AA+

Stable

Odyssey Reinsurance Company

A

Stable

A-

Stable

A3

Positive

A-

Stable

Partner Reinsurance Co Ltd

A+

Stable

AA-

Stable

Aa3*

Platinum Underwriters Bermuda Ltd

A*

Stable

A

Stable

Renaissance Reinsurance Ltd

A+*

Stable

A+

SCOR Global P&C SE

A*

Stable

Sirius International Insurance Corp

A

Swiss Reinsurance Co

National Indemnity Company

A-*

AA-

Negative

AA-

Negative

NR

-

A*

Stable

Stable

A1

Stable

AA-

Stable

A*

Positive

A2

Positive

A*

Positive

Stable

A-

Stable

A3

Stable

A-

Stable

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 June 2011 Source: A.M. Best, Fitch, Moody’s, Standard & Poor’s

15

The Aon Benfield Aggregate – Three Months Ended March 31, 2011

Appendix 1: Aon Benfield Aggregate Data Exhibit 23: 1Q 2011 Results

Reporting Company

P&C Gross

P&C Gross

P&C Net

P&C Net

Premiums

Premiums

Premiums

Premiums

Currency

Written

Written

Written

Written

(millions)

1Q 2010

1Q 2011

Change

1Q 2010

1Q 2011

Change

ACE

USD

4,400

4,228

-4%

3,186

3,037

-5%

Allied World

USD

504

561

11%

433

481

11%

Alterra

USD

370

627

69%

217

490

126%

AAIC

USD

206

197

-5%

57

50

-12%

Arch

USD

954

965

1%

768

764

0%

Argo

USD

405

348

-14%

288

244

-15%

Ariel

USD

268

260

-3%

238

234

-2%

Aspen

USD

703

671

-4%

580

510

-12%

Axis

USD

1,425

1,548

9%

1,244

1,401

13%

Endurance

USD

819

1,000

22%

703

799

14%

Everest Re

USD

1,021

1,065

4%

969

1,020

5%

Fairfax

USD

1,332

1,801

35%

1,095

1,510

38%

Flagstone

USD

400

422

5%

324

282

-13%

Gen Re

USD

315

254

-19%

158

129

-18%

Hannover Re

EUR

1,722

1,924

12%

1,551

1,690

9%

Maiden

USD

327

471

44%

311

450

44%

Montpelier Re

USD

275

254

-8%

262

227

-14%

Munich Re*

EUR

3,949

4,363

10%

3,669

4,220

15%

NICO

USD

1,633

2,316

42%

1,479

2,100

42%

PartnerRe

USD

1,720

1,348

-22%

1,607

1,262

-21%

Platinum

USD

253

207

-18%

247

195

-21%

RenRe

USD

516

611

18%

407

453

11%

SCOR

EUR

909

953

5%

825

848

3%

Swiss Re

USD

5,608

6,198

11%

4,424

4,940

12%

Transatlantic

USD

1,114

1,123

1%

1,026

1,044

2%

Validus

USD

871

850

-2%

780

740

-5%

White Mountains

USD

1,193

983

-18%

945

861

-9%

XL

USD

1,922

2,099

9%

1,597

1,714

7%

ABA

USD

37,662

40,321

7.1%

31,712

34,189

7.8%

*P&C reinsurance segment only Source: Company reports, Aon Benfield Market Analysis

16

Aon Benfield

Exhibit 23: 1Q 2011 Results (cont’d) Calendar Year Loss

Loss

Expense

Expense

Combined

Ratio

Ratio

Ratio

Ratio

Ratio

Ratio

1Q 2010

1Q 2011

1Q 2010

1Q 2011

1Q 2010

1Q 2011

Change

ACE

61.9%

73.4%

30.9%

31.6%

92.8%

105.0%

12.2pp

Allied World

68.6%

90.9%

30.9%

31.7%

99.5%

122.6%

23.1pp

Alterra

64.6%

80.2%

25.9%

32.3%

90.5%

112.5%

22.0pp

AAIC

76.0%

91.0%

15.6%

16.1%

91.6%

107.1%

15.5pp

Arch

63.9%

77.9%

32.5%

32.1%

96.4%

110.0%

13.6pp

Argo

65.6%

104.7%

39.4%

40.5%

105.0%

145.2%

40.2pp

Ariel

39.7%

62.1%

40.3%

37.6%

80.0%

99.7%

19.7pp

Aspen

81.0%

116.9%

29.3%

31.6%

110.3%

148.5%

38.2pp

Axis

67.3%

129.4%

31.0%

31.9%

98.3%

161.3%

63.1pp

Endurance

63.7%

105.0%

33.6%

34.3%

97.3%

139.3%

42.0pp

Everest Re

97.8%

123.6%

27.1%

27.8%

124.9%

151.4%

26.5pp

Fairfax

81.9%

96.4%

29.4%

32.2%

111.3%

128.7%

17.4pp

Flagstone

58.8%

139.6%

38.8%

30.7%

97.6%

170.3%

72.7pp

Gen Re

71.9%

116.7%

36.7%

10.8%

108.7%

127.5%

18.8pp

Hannover Re

74.0%

98.4%

25.3%

25.4%

99.3%

123.8%

24.5pp

Maiden

64.5%

63.0%

32.5%

34.0%

97.1%

97.0%

-0.1pp

Montpelier Re

91.0%

149.5%

32.5%

29.3%

123.5%

178.8%

55.3pp

Munich Re

81.0%

130.0%

28.2%

29.4%

109.2%

159.4%

50.2pp

NICO

59.0%

138.0%

34.9%

33.5%

94.0%

171.5%

77.5pp

PartnerRe

89.1%

166.0%

27.8%

27.7%

116.9%

193.7%

76.8pp

Platinum

74.7%

174.8%

24.0%

25.6%

98.7%

200.4%

101.6pp

RenRe

38.8%

205.7%

28.6%

24.3%

67.4%

230.0%

162.6pp

SCOR

81.4%

107.2%

27.7%

28.0%

109.1%

135.2%

26.1pp

Swiss Re

83.8%

136.6%

25.6%

27.1%

109.4%

163.7%

54.3pp

Transatlantic

79.2%

122.2%

27.5%

25.6%

106.7%

147.8%

41.1pp

104.6%

110.9%

29.7%

32.1%

134.3%

143.0%

8.7pp

White Mountains

81.3%

75.7%

38.7%

38.3%

120.0%

114.0%

-5.9pp

XL

70.6%

95.1%

29.9%

30.7%

100.5%

125.8%

25.3pp

ABA

75.9%

113.9%

29.5%

29.9%

105.4%

143.7%

38.3pp

Company

Validus

Combined

Reporting currency (millions) Source: Company reports, Aon Benfield Market Analysis

17

The Aon Benfield Aggregate – Three Months Ended March 31, 2011

Exhibit 23: 1Q 2011 Results (cont’d) Accident Year Prior Year

Prior Year

Prior Year

Prior Year

Accident

Reserve

Reserve

Reserve

Reserve

Year

Year

(Release)/

(Release)/

Adjustment

Adjustment

Combined

Combined

Addition

Addition

as % of NPE

as % of NPE

Ratio

Ratio

1Q 2010

1Q 2011

1Q 2010

1Q 2011

1Q 2010

1Q 2011

Change

ACE

-96

-93

3.3%

3.2%

96.1%

108.2%

12.1pp

Allied World

-74

-44

21.8%

13.2%

121.4%

135.8%

14.5pp

Alterra

-17

-30

8.8%

8.0%

99.3%

120.5%

21.2pp

AAIC

-12

-11

13.6%

16.5%

105.2%

123.6%

18.4pp

Arch

-30

-58

4.4%

9.2%

100.9%

119.2%

18.4pp

Argo

-11

5

3.4%

-1.8%

108.4%

143.4%

35.0pp

Ariel

0

0

0.0%

0.0%

80.0%

99.7%

19.7pp

Aspen

-13

-22

2.8%

4.8%

113.1%

153.3%

40.2pp

Axis

-81

-50

11.7%

6.3%

110.0%

167.6%

57.7pp

Endurance

-39

-49

10.6%

12.7%

107.8%

152.0%

44.2pp

Everest Re

0

-1

0.0%

0.1%

124.9%

151.5%

26.6pp

-6

-14

0.6%

1.0%

111.9%

129.7%

17.8pp

Flagstone

-25

9

11.4%

-3.7%

109.0%

166.6%

57.6pp

Gen Re

-48

-41

29.7%

31.6%

138.4%

159.1%

20.7pp

-140

-150

11.1%

10.9%

110.5%

134.7%

24.3pp

0

0

0.0%

0.0%

97.1%

97.0%

-0.1pp

-24

-34

15.2%

20.2%

138.7%

199.0%

60.4pp

0

0

0.0%

0.0%

109.2%

159.4%

50.2pp

-284

-22

26.3%

1.6%

120.3%

173.1%

52.9pp

PartnerRe

-93

-142

9.4%

16.1%

126.3%

209.8%

83.5pp

Platinum

-49

-33

22.5%

18.1%

121.2%

218.5%

97.2pp

RenRe

-112

-68

44.8%

22.3%

112.2%

252.3%

140.1pp

SCOR

0

-23

0.0%

2.9%

109.1%

138.1%

29.0pp

Swiss Re

0

-157

0.0%

6.2%

109.4%

169.9%

60.5pp

-7

-15

0.7%

1.6%

107.4%

149.4%

42.0pp

Validus

-27

-27

5.8%

6.2%

140.1%

149.1%

9.0pp

White Mountains

-16

-24

1.9%

3.4%

121.9%

117.5%

-4.4pp

XL

-87

-71

6.9%

5.6%

107.4%

131.4%

24.0pp

-1,354

-1,230

5.4%

4.7%

110.8%

148.4%

37.6pp

Company

Fairfax

Hannover Re Maiden Montpelier Re Munich Re NICO

Transatlantic

ABA Reporting currency (millions)

Source: Company reports, Aon Benfield Market Analysis

18

Accident

Aon Benfield

Exhibit 23: 1Q 2011 Results (cont’d) Net

Net

Capital

Capital

Total

Total

Investment

Investment

Gains/

Gains/

Investment

Investment

Income

Income

(Losses)

(Losses)

Return

Return

1Q 2010

1Q 2011

1Q 2010

1Q 2011

1Q 2010

1Q 2011

Change

504

544

168

-45

672

499

-26%

Allied World

69

50

77

50

146

101

-31%

Alterra

48

58

6

-20

54

38

-30%

AAIC

7

6

0

0

7

6

-15%

Arch

93

88

46

18

139

106

-24%

Argo

34

33

15

2

48

36

-26%

Ariel

17

13

16

-4

33

9

-73%

Aspen

59

56

10

5

70

61

-13%

105

111

16

30

121

141

17%

Endurance

56

53

3

2

59

55

-8%

Everest Re

161

179

76

20

237

198

-16%

Fairfax

181

172

598

-102

779

70

-91%

7

9

10

11

17

20

19%

Gen Re

157

666

1

1

158

667

323%

Hannover Re

276

283

4

109

279

392

40%

Maiden

18

19

0

0

18

19

7%

Montpelier Re

19

18

29

17

47

34

-28%

1,898

1,693

562

263

2,460

1,956

-20%

NICO

591

1,485

1,741

-201

2,332

1,285

-45%

PartnerRe

173

152

146

-112

319

40

-87%

Platinum

38

32

-15

3

23

35

55%

RenRe

66

60

48

-5

114

55

-52%

SCOR

133

115

31

51

164

166

1%

1,479

1,362

1,380

197

2,859

1,559

-45%

113

107

-2

55

111

162

47%

Validus

34

30

27

-6

61

24

-62%

White Mountains

61

54

87

23

148

76

-48%

308

280

-57

-63

252

217

-14%

7,590

8,500

5,251

456

12,842

8,955

-30%

Company ACE

Axis

Flagstone

Munich Re

Swiss Re Transatlantic

XL ABA Reporting currency (millions)

Source: Company reports, Aon Benfield Market Analysis

19

The Aon Benfield Aggregate – Three Months Ended March 31, 2011

Exhibit 23: 1Q 2011 Results (cont’d)

Company

Pre-tax

Pre-tax

Pre-tax

Pre-tax

Profit

Profit

Operating ROE*

Operating ROE*

1Q 2010

1Q 2011

Change

1Q 2010

1Q 2011

Change

ACE

879

356

-59%

3.5%

1.7%

-1.8pp

Allied World

137

11

-92%

1.8%

-1.3%

-3.1pp

Alterra

38

-49

-231%

2.0%

-1.0%

-3.0pp

AAIC

13

1

-93%

2.6%

0.2%

-2.5pp

Arch

224

25

-89%

4.1%

0.2%

-3.9pp

Argo

34

-98

-392%

1.2%

-6.4%

-7.5pp

Ariel

75

19

-75%

3.7%

1.6%

-2.1pp

Aspen

20

-168

-929%

0.3%

-5.5%

-5.8pp

132

-373

-382%

2.1%

-7.5%

-9.6pp

Endurance

53

-102

-292%

1.8%

-4.0%

-5.8pp

Everest Re

-10

-342

-3398%

-1.4%

-5.9%

-4.5pp

Fairfax

545

-396

-173%

-0.7%

-3.5%

-2.8pp

41

-165

-504%

2.3%

-16.1%

-18.4pp

Gen Re

144

631

340%

1.4%

6.7%

5.3pp

Hannover Re

220

21

-91%

4.9%

-1.7%

-6.6pp

14

21

47%

2.0%

2.7%

0.7pp

8

-105

-1413%

-1.3%

-7.8%

-6.6pp

558

-1,560

-380%

0.0%

-8.4%

-8.4pp

2,326

405

-83%

1.2%

0.9%

-0.3pp

PartnerRe

105

-834

-894%

-0.5%

-10.8%

-10.2pp

Platinum

16

-157

-1090%

1.5%

-8.9%

-10.4pp

RenRe

172

-323

-288%

2.7%

-7.3%

-10.0pp

SCOR

27

-162

-700%

-0.1%

-5.0%

-4.9pp

340

-918

-370%

-4.4%

-4.2%

0.2pp

19

-321

-1781%

0.5%

-9.0%

-9.6pp

-119

-174

-46%

-3.7%

-4.9%

-1.2pp

White Mountains

-27

-33

-21%

-2.6%

-1.3%

1.3pp

XL

162

-240

-248%

2.2%

-1.7%

-3.9pp

6,453

-5,659

-188%

0.5%

-2.5%

-3.0pp

Axis

Flagstone

Maiden Montpelier Re Munich Re NICO

Swiss Re Transatlantic Validus

ABA

*Calculated by excluding the impact of net realized and unrealized investment gains/losses Reporting currency (millions) Source: Company reports, Aon Benfield Market Analysis

20

Aon Benfield

Exhibit 23: 1Q 2011 Results (cont’d) Return on Net Income

Net Income

1Q 2010

1Q 2011

ACE

755

Allied World

Return on

Equity*

Equity*

Change

1Q 2010

1Q 2011

Change

259

-66%

3.7%

1.1%

-2.6pp

134

9

-94%

4.1%

0.3%

-3.8pp

Alterra

36

-47

-231%

2.2%

-1.7%

-3.9pp

AAIC

11

1

92%

2.4%

0.2%

-2.2pp

Arch

211

19

-91%

5.2%

0.5%

-4.8pp

Argo

21

-95

-557%

1.3%

-6.0%

-7.3pp

Ariel

71

19

-73%

4.4%

1.4%

-3.1pp

Aspen

13

-157

-1349%

0.4%

-5.6%

-6.1pp

112

-384

-443%

2.3%

-7.8%

-10.1pp

Endurance

52

-91

-276%

1.9%

-3.5%

-5.3pp

Everest Re

-23

-316

1295%

-0.4%

-5.2%

-4.8pp

Fairfax

414

-253

-161%

5.5%

-3.4%

-8.9pp

32

-161

-610%

2.6%

-15.3%

-17.9pp

Gen Re

101

643

540%

1.0%

6.8%

5.8pp

Hannover Re

151

52

-65%

3.9%

1.2%

-2.7pp

Maiden

14

19

42%

2.0%

2.5%

0.6pp

Montpelier Re

10

-104

-1149%

0.6%

-6.7%

-7.3pp

482

-947

-296%

2.1%

-4.4%

-6.5pp

2,161

223

-90%

4.3%

0.3%

-4.0pp

PartnerRe

71

-816

-1243%

1.0%

-12.7%

-13.7pp

Platinum

15

-157

-1119%

0.7%

-8.8%

-9.6pp

RenRe

165

-248

-250%

5.2%

-7.8%

-13.0pp

SCOR

36

-80

-322%

0.9%

-1.9%

-2.8pp

158

-665

-521%

0.7%

-2.7%

-3.4pp

16

-190

-1298%

0.4%

-4.6%

-5.0pp

-118

-172

46%

-3.0%

-5.1%

-2.0pp

White Mountains

-40

-28

-30%

-1.1%

-0.8%

0.3pp

XL

128

-227

-278%

1.3%

-2.4%

-3.7pp

5,443

-4,253

-178.1%

2.5%

-1.8%

-4.3pp

Company

Axis

Flagstone

Munich Re NICO

Swiss Re Transatlantic Validus

ABA

*Net income divided by average common shareholders’ equity Reporting currency (millions) Source: Company reports, Aon Benfield Market Analysis

21

The Aon Benfield Aggregate – Three Months Ended March 31, 2011

Exhibit 23: 1Q 2011 Results (cont’d) Total

Total

Shareholders’

Investments

Investments

Funds

Funds

1Q 2010

1Q 2011

Change

FY 2010

1Q 2011

Change

54,555

56,063

3%

22,974

23,376

2%

Allied World

8,077

8,033

-1%

3,076

2,951

-4%

Alterra

7,937

7,917

0%

2,918

2,723

-7%

AAIC

906

869

-4%

494

500

1%

Arch

12,237

12,741

4%

4,513

4,326

-4%

Argo

4,332

4,321

0%

1,626

1,523

-6%

Ariel

2,252

1,977

-12%

1,545

1,218

-21%

Aspen

7,348

7,491

2%

3,241

3,051

-6%

12,666

13,095

3%

5,625

5,190

-8%

Endurance

6,280

6,160

-2%

2,848

2,408

-15%

Everest Re

15,894

15,875

0%

6,284

5,914

-6%

Fairfax

23,487

23,854

2%

8,633

8,180

-5%

2,039

1,990

-2%

1,135

969

-15%

Gen Re

14,024

14,107

1%

9,319

9,470

2%

Hannover Re

38,058

36,811

-3%

4,509

4,348

-4%

Maiden

2,401

2,363

-2%

750

770

3%

Montpelier Re

2,808

2,829

1%

1,629

1,472

-10%

Munich Re

184,149

180,575

-2%

22,783

20,268

-11%

NICO

104,826

109,448

4%

68,437

67,526

-1%

PartnerRe

19,320

19,245

0%

7,207

6,175

-14%

Platinum

4,328

4,251

-2%

1,895

1,665

-12%

RenRe

6,413

6,589

3%

3,936

3,500

-11%

SCOR

20,956

20,021

-4%

4,345

4,159

-4%

184,306

183,244

-1%

25,342

24,438

-4%

13,408

13,631

2%

4,284

4,041

-6%

Validus

5,796

5,959

3%

3,505

3,315

-5%

White Mountains

9,743

9,692

-1%

3,653

3,595

-2%

35,800

36,066

1%

9,611

9,267

-4%

885,157

903,953

2%

246,634

238,305

-3.4%

Company ACE

Axis

Flagstone

Swiss Re Transatlantic

XL ABA Reporting currency (millions)

Source: Company reports, Aon Benfield Market Analysis

22

Shareholders’

Contact Information Should you have any questions about this report, please contact [email protected], or a member of Aon Benfield Analytics, including: Mike Van Slooten [email protected] Jonny Eggins [email protected] Eleanore Obst [email protected]

©Aon Limited trading as Aon Benfield (for itself and on behalf of each subsidiary company of Aon Corporation) (‘‘Aon Benfield’’) reserves all rights to the content of this report (‘‘Report’’). This Report is for distribution to Aon Benfield and the organisation to which it was originally delivered only. Copies may be made by that organisation for its own internal purposes but this Report may not be distributed in whole or in part to any third party without both (i) the prior written consent of Aon Benfield and (ii) the third party having first signed a ‘‘recipient of report’’ letter in a form acceptable to Aon Benfield. Aon Benfield cannot accept any liability to any third party to whom this Report is disclosed, whether disclosed in compliance with the preceding sentence of otherwise. To the extent this Report expresses any recommendation or assessment on any aspect of risk, the recipient acknowledges that any such recommendation or assessment is an expression of Aon Benfield's opinion only, and is not a statement of fact. Any decision to rely on any such recommendation or assessment of risk is entirely the responsibility of the recipient. Aon Benfield will not in any event be responsible for any losses that may be incurred by any party as a result of any reliance placed on any such opinion. The recipient acknowledges that this Report does not replace the need for the recipient to undertake its own assessment. The recipient acknowledges that in preparing this Report Aon Benfield may have based analysis on data provided by the recipient and/or from third party sources. This data may have been subjected to mathematical and/or empirical analysis and modelling. Aon Benfield has not verified, and accepts no responsibility for, the accuracy or completeness of any such data. In addition, the recipient acknowledges that any form of mathematical and/or empirical analysis and modelling (including that used in the preparation of this Report) may produce results which differ from actual events or losses. The Aon Benfield analysis has been undertaken from the perspective of a reinsurance broker. Consequently this Report does not constitute an opinion of reserving levels or accounting treatment. This Report does not constitute any form of legal, accounting, taxation, regulatory or actuarial advice.

55 Bishopsgate, London, EC2N 3BD t: +44 (0)20 7088 0044 | f: +44 (0)20 7575 7001 | aonbenfield.com Copyright Aon Limited trading as Aon Benfield 2010 | 6/2011