Reinsurers return more capital to shareholders than earned in H1 '17

Reinsurers have returned more capital to shareholders in the first half of 2017 than they earned, according to the September Willis Re Reinsurance Market Report.

According to the Willis Reinsurance Index, the sector returned $10.8 billion of capital through dividends and share buybacks to shareholders in the first half of 2017. The aggregate net income for the period was $8.3 billion. Net income declined compared to the $14.5 billion recorded in the first half of 2016.

The first half net income was reduced by market pressures which include a soft market driven by overcapacity and pressure on investment returns from a low interest rate environment.

John Cavanagh, Global CEO of Willis Re, said: “Ongoing market pressures are undoubtedly manifesting themselves in a diminishing underlying return on equity and further impacting reduced net incomes. This deterioration is further weakening the global reinsurance industry’s performance. However, despite these challenging conditions shareholders’ funds have strengthened, maintaining robust balance sheets across the market.”

Shareholders’ funds in the Willis Reinsurance Index totalled $348.2 billion in the first half of 2017, a 1.2 percent increase from $344.1 billion at year-end 2016.

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