Reinsurance capital hit $580 billion at the end of the first quarter of the year — equalling the previous peak supply reached in the same quarter last year.

The latest figure was up 3 per cent on the end of 2015.

Alternative market capacity, however, rose 1.4 per cent to $73 billion.

The figures were contained in the Aon Benfield reinsurance market outlook update, which said: “In the aggregate, insurers continue to benefit from high supply in reinsurance capacity and relatively low catastrophe losses in most regions, with abundant capacity to fund insurer growth aspirations.”

The report said that catastrophe loss activity in the first half of this year was “slightly higher” than the median 10-year result, ending the period at an estimated total of $28 billion.

It added that severe storms accounted for 40 per cent of the total insured losses and a major fire in Canada’s Fort McMurray has been estimated at costing insurers $3.5 billion — the most expensive disaster in Canadian history.

The report added: “Looking to the remainder of 2016, historical loss trends resulting from the expected transition to La Nina by the later half of 2016 suggest that global catastrophe losses could increase.”

And it said the expected transition to the La Nina weather cycle — a cooling of the water in the equatorial Pacific that occurs at irregular intervals and is associated with widespread changes in weather patterns — suggested that global catastrophe losses could increase.

La Nina conditions often make it more likely tropical cyclones will develop and threaten landfall in the areas of the Caribbean, Gulf of Mexico and the east coast of the US and Canada.

The report said: “Preliminary insured catastrophe losses were elevated during the first half of 2016 as an above average number of events — 150 plus — caused significant damage across each major continent.

“Through the first six months of the year, the public and private insurance industry has sustained estimated losses of $28 billion.

“While it is 9 per cent below the recent 10-year average of roughly $31 billion, 2016 losses are 11 per cent higher than the median result.”

A total of five individual events in the first six months of the year amounted to more than $1 billion each in insurable losses, with the top three all outside the US.

The most expensive disaster was April’s Kumamoto earthquake, which caused an estimated $4.5 billion of damage.

The Fort McMurray fire was the most expensive weather disaster.

Other major events included flooding and storms in Europe in late May and early June and several earlier major storms in the US.