The insurance industry has suffered the loss of over $100bn (£64bn) of capital over the past two years, excluding the World Trade Centre losses, Aon chairman Dennis Mahoney says
Speaking last nigh ...
The insurance industry has suffered the loss of over $100bn (£64bn) of capital over the past two years, excluding the World Trade Centre losses, according to Aon chairman Dennis Mahoney.
Speaking last night in his address at the Insurance Institute of London's annual general meeting, he made it clear that insurers could not be society's safety net.
He added that approximately $25bn (£16bn) of new capital entered the industry during this time. However, at least half was immediately dedicated to filling holes in balance sheets, he said.
He added: "Notwithstanding the fact that virtually every insurance and reinsurance entity around the world has been reporting combined ratios well in excess of 100% [and some reinsurers above 125%] a great deal of the problem has not been losses at all, but rather the depletion of their assets.
"These assets, be they equities, corporate bonds or reinsurance recoverables, are all being diminished, damaged and, in some cases, ravaged to a greater or lesser extent.
"Further planned attempts to raise additional capital are going to be very very hard going indeed. Investors generally are not confident about our ability to manage our industry well and deliver the required returns on capital.
"We, within the insurance and reinsurance industry, will have to become better stewards of capital. So we all have to develop a coherent approach to this new world of risk and regulation, and how we conduct insurance business."
