Bermuda, US and large international re/insurance companies lost about 15 percent of their capacity in 2008 as measured by shareholders' equity.

That is according to AM Best Co.'s special report released last week, which said that two excellent operating years preceding 2008, sizable capital increases after Hurricane Katrina and significantly improved loss reserves have enabled the re/insurance industry to withstand the barrage of investment charges and catastrophe losses.

Results from Best's stress testing of risk-adjusted capitalisation, along with potential near-term underwriting opportunities, shape the ratings agency's stable rating outlook for the global non-life reinsurance industry.

As expected, effective capital management was critical to re/insurers' long-term competitive positioning through much of 2008, but this gave way to capital preservation amid major catastrophe losses and the investment markets' meltdown later in the year, said the report.

"Despite significant hurdles, the reinsurance industry's core operations reported sound underwriting results, with the majority of carriers posting profitable combined ratios below 100," it read.

Best said that the Bermuda and US re/insurance market absorbed Hurricane Ike, with total insured losses nearing $20 billion, but still posted a 2008 combined ratio of 93.6 - up 6.9 points from 86.7 in 2007.