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
3
Executive Summary
4
Aon Benfield Aggregate Capital
5
Capital Development
5
Capital Management
7 8
Premium Income
9
Premium Distribution Earnings
10
Underwriting Performance
10
Investment Results
12
Return on Equity
13
Ratings
15
Appendix 1: Aon Benfield Aggregate Data
16
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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]
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