The world’s 10 largest reinsurers have been hit hard by the financial catastrophe. At the beginning of 2008, they held a combined USD68.4 billion in equities. If the value of these assets fell by 30 percent—the rate at which the broader equity market declined—their holdings would lose USD21 billion in value. This translates to an aggregate surplus of USD73 billion (from USD94 billion at the beginning of the year). Yet, the premium-to-surplus ratio is slightly above 1:1, indicating that the industry’s stability is not in jeopardy.
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