• A Katrina-sized loss in Japan in first-quarter 2011.

• An equivalent-sized combination of other losses over the last 15 months, which includes the Chilean earthquake, the Deepwater Horizon explosion, the September 2010 earthquake in New Zealand, and another in February 2011, as well as floods in Australia early this year.

• Record levels of U.S. tornado losses in the second quarter of 2011.

With recent model changes—RMS Version 11 and AIR Version 12 to a lesser extent—requiring reinsurers to assign more capital to catastrophe exposures, the U.S. coastal property market has felt a capital impact like “three Katrinas,” Holborn says, putting a midpoint estimate of large reinsurance losses (those over 0.5 percent of industry net earned premium) for the 2010 at $19.8 billion, and estimating a $43.5 billion reinsurance market impact for the 2011 events.

According to the report, the $19.8 billion for 2010 represented 9.2 percent of gross premiums and a 9.4 percent hit to capital at year-end 2009. The 2011 loss total of $43.5 billion through the first half represents 20.2 percent of premiums and a similar hit to year-end 2010 capital, the report says.

Separately, Willis Re estimates that natural catastrophes have cost reinsurers roughly $48 billion over the past 16 months.

The Holborn report notes large losses for 2010 and 2011 together represents the worst two-year block of large losses to the reinsurance industry in dollars. In addition, as a percentage of both premiums and surplus, large losses for the 2010-2011 period were worse than the 2004-2005 period, Holborn says.

Comparatively, the 2004-2005 period netted roughly $28.0 billion in large losses to reinsurers, Holborn estimates. In 2005, the year of Katrina, large losses represented 15.1 percent of gross premiums for reinsurers and 19.3 percent of year-end 2004 capital.

In addition to the higher dollar-value of large losses, Holborn says the higher percentage of premium for 2010-2011 period is, in part, attributable to depressed property values and soft-market policy terms, and speculates that “both will continue into 2012,” in spite some recent rate increases.

Although Holborn says property catastrophe-reinsurance rate hikes for coastal-exposed programs were in the 0-20 percent range (for accounts without recent losses), other classes of business that have not had model changes or do not rely as much on capital levels, have had more stable pricing, according to the report.

Looking ahead, the broker says the overall pricing environment at year-end will depend on loss experience in wind season and “financial factors.”

Turning to some key financial indicators, Holborn, estimates that the global reinsurance industry:

• Turned in a combined ratio of 88.3 in 2010, roughly two points higher than in 2009

• Will report a combined ratio in the 105-115 range for 2011, assuming no further worldwide events above $5 billion in direct losses.

• Saw a decline in net earned premiums of about 2 percent in 2010 to $184 billion, and will see flat volume at year-end 2011—with midyear rate increases failing to outpace earlier declines.

• Saw the overall worldwide capital level grow to $215 billion in 2010.

• Will report an aggregate capital level in the range of $205-$215 billion in 2011.

Holborn also believes reinsurers’ reserves “weakened by a least $10 billion during 2010, overstating income.” The broker explains that in addition to booking reserve savings on casualty business for prior years, reinsurers had not booked the Chile and earlier New Zealand earthquakes and December Australian floods to their ultimate values at year-end 2010.