March 24th, 2009

Shareholders’ Funds Down 21% for European Reinsurance Composite

Posted at 1:30 AM ET

klein_chris_bioChristopher Klein, Managing Director and Head of Global Business Intelligence
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The Guy Carpenter European Reinsurance Composite’s aggregate shareholders’ funds fell 21 percent year-over-year. Excluding Swiss Re’s capital increase, it would have been down 23 percent. Several drivers led to the USD20 billion drop in total shareholders’ funds (USD93 billion to USD73 billion). Unrealized losses accounted for 60 percent of the decrease.

(Chart after the jump)

europeancompositeshf

Companies in the European Reinsurance Composite had, on average, greater exposure to equity assets than reinsurers in other regions, but their property-catastrophe exposure was not as large in relation to their underwriting portfolios. Technical earnings counteracted some of the losses that resulted from investment asset impairment. Several companies in the European Reinsurance Composite sold substantial portions of their equity asset holdings, while others tried to hedge some of the more volatile asset classes.

This analysis does not include Paris Re. When this data becomes available in sufficient detail we will update the chart, though we do not expect any directional changes.

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