Mike Van Slooten, Head of Market Analysis at Aon Benfield Analytics said the market’s capital position had not broadly changed in the nine months to September 2011, and therefore the huge pre-tax catastrophe losses had been absorbed by the market.

He said this although the combined ratio was at 110.5% for the period according to the broker’s quarterly analysis of 28 major global underwriters.

He said at the start of the year the 28 underwriters had $24.5 billion of capital and the figure was $20.7 billion in September last year.

“Catastrophe losses added 25 points to the combined ratio and is up from 10 points in 2010,” he explained.

However Mr Van Slooten said despite the losses in 2011 the biggest fear for many of the firm’s clients is the eurozone sovereign debt crisis and the raft of downgrades over the past 12 months.

“The rating agencies have taken action over debt and what is of concern is that Standard & Poor’s in particular will take a view of firms which are domiciled in countries which see their sovereign debt downgraded; as we have seen at the end of the year in some areas of the eurozone.

“This is not just a European problem it is a global one and we are hearing from clients in the United States and elsewhere which are concerned over the effects of the debt crisis in Europe.”

He added: “I firmly believe that if 2011 was the year of the natural catastrophes then 2012 may well prove to be the year of the debt crisis as there is still no solution in sight.”

He also said the concern for many was that much of the sovereign debt was held by financial institutions and in particular the banks.

“European banks are effectively being supported by the European Central Bank and while there is no real direct exposure for the industry to any great degree it does have an indirect exposure through the European banks.

“It will be the main issue on the agenda throughout 2012. What is a worry is that without economic growth the debt levels will not come down.

“It is a difficult position for both reinsurers and our clients and we may see some write-down’s in the year ahead.”