Ratings agency AM Best has described the financial position of global reinsurers as “resilient” despite the numerous and severe loss events last year.

According to a new report from the agency, losses in 2011 came close to $US110 billion ($106 billion).

The only year that topped this was 2005, when losses from hurricanes Katrina, Rita and Wilma and other smaller events led to claims worth $US125 billion ($120.4 billion).

The report says reinsurer capacity has remained healthy, and that the market has “responded without any dislocation or squeeze on capacity”.

“For the majority of global reinsurers, the losses in 2011 amounted to nothing more than a negative earnings event,” the report says.

It lists a combination of factors for this resilience, with one main reason being “lessons learned” from past large catastrophes, where huge steps were made in developing new enterprise risk management strategies.

Reinsurers have also been better placed to allocate capital within complex risk portfolios, due to advances in catastrophe and economic capital models.

The report points out that while “cold spots” such as Australia, New Zealand and Thailand traditionally did not produce significant losses, reinsurance companies have more recently reallocated capacity and demanded higher rates in these areas.

AM Best rates overall global reinsurance as “stable” and well capitalised.

But the report cautions that “positive momentum in reinsurance pricing may be short-lived” if the soft market continues.

“In that scenario, the segment’s capital strength would slowly erode, and AM Best would consider revising the ratings outlook to negative,” the report concludes.