Global reinsurer capital topped $US510 billion ($558.67 billion) at June 30, up 1% on the previous year, while profits grew following fewer catastrophes.

Property and casualty premium increased 5% to $US109 billion ($119.1 billion) in the six months to June 30, with 45% in direct insurance and 55% in reinsurance, according to the Aon Benfield Aggregate survey of 31 reinsurers.

“The main engine of organic growth was the US market, driven by improving economic conditions and higher pricing in certain primary insurance lines,” it said.

The 31 reinsurers’ combined profit grew 6% to $US16 billion ($17.49 billion) on higher premiums, lower catastrophe losses and prior-year reserve releases.

The combined ratio improved to 89% from 90.7%, with natural catastrophe losses of $US20 billion ($21.86 billion) down 20%.

Investment income was unchanged at $US18.2 billion ($19.89 billion).

Aon Benfield says the way capital is raised and deployed is changing, with new investors backing alternatives to traditional reinsurance, forcing reinsurers to re-evaluate their business models.

“Reinsurance as an asset class has performed relatively well in an environment of low interest rates and is viewed as having limited correlation with broader capital market movements.”

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