The worldwide insurance industry has been resilient in the face of the global financial crisis (GFC) and last year’s catastrophes, according to the International Association of Insurance Supervisors (IAIS).

It has achieved considerable performance improvements since the GFC and appeared better capitalised at the end of 2011 than at the start of the crash, the IAIS’s first global insurance market report says.

It says the reinsurance sector absorbed record-high losses last year with a smaller impact on equity capital than in 2005, the previous natural catastrophe record year.

“Despite losses caused by an exceptional series of natural catastrophes in the Asia and Pacific region, non-life insurers and reinsurers appear to have recovered most of their capital over the course of the year.

“At the same time, declining interest rates and a widespread recovery of equity markets benefitted the year-end valuation of financial assets held by life and non-life insurers.”

For general insurers, average premium growth was negative in 2009 and 2010. The GFC hit hardest in Western Europe and the US, which contracted while insurance sectors in other parts of the world continued to grow.

The GFC did not affect life insurers as much as general insurers, and reinsurers’ average premium growth was positive from 2008 to last year. European reinsurers were the primary drivers of this growth but performance varied widely between companies, the IAIS says.

Reinsurers lost more shareholders’ equity because of the GFC in 2008 than they lost because of the catastrophes last year, the report says. Reinsurers’ shareholders’ equity is now at a higher level than in 2007.