Capital in the global reinsurance industry has increased 8% in H1 2019 to US$559 billion from US$518 billion at the end of last year.
This was according to findings from the Reinsurance Market Report from Willis Re, the reinsurance business of global advisory company Willis Towers Watson.
The largest component was capital of the 36 reinsurance companies tracked in the Willis Reinsurance Index, which went up 11% to US$440 billion due to falling bond yields and rising equity markets.
The return on equity (RoE) for natural catastrophe (nat cat) losses and prior year reserve releases jumped 13.9% from 8.5% at the middle of 2018.
Normalising for nat cat losses and removing the benefit from reserve, meant an underlying RoE of 10.8% or 4.2% excluding investment gains.
James Kent, global chief executive for Willis Re, said looking behind the headline figures revealed a positive direction for reinsurers so far this year with modest reductions in non-catastrophe combined and expense ratios.
“This improvement is supported by the positive trajectory seen in 2019 market pricing across many lines,” Kent said.
“The slowdown in reserve releases continues, however, so in the months and years ahead reinsurers will need to further realize these trends.”