Global reinsurance capital rose 8% in the last six months to July, Willis Re says.

The total amount of global capital dedicated to reinsurance now sits at an all-time high of $US559 billion ($820 billion), up from $US518 billion ($759.85 billion) at the end of 2018, the reinsurance market report says.

Strong investment markets were the main driver of the growth, with falling bond yields and rising equity markets.

Shaky equity market performance has led to significant fluctuations in dedicated capital. The total equity held by 36 reinsurers tracked by Willis Re declined by 10% last year, reversing an 8% growth spurt in 2017.

Of the 17 reinsurers that disclosed figures on their past losses, combined ratio deteriorated from 93.3% to 94.9%, thanks to higher natural catastrophe activity this year and a lower pace of reserve releases.

Deteriorating loss estimates over the past two years led to lower reserve releases, particularly from Japanese typhoon Jebi.

Lower expense ratios were driven by premium growth, Willis Re says. Net written premium increased about 6% compared to end-2018.

“Looking behind the headline figures reveals a positive direction of travel for reinsurers so far this year, with modest but important reductions in non-catastrophe combined and expense ratios,” Global CEO James Kent said.

“This improvement is supported by the positive trajectory seen in 2019 market pricing across many lines.”