Bermudan Insurance Sector Retains Strength In Downturn

by Phillip Morton, Investors Offshore.com

19 February 2010

The Bermuda Monetary Authority has reported that the Bermuda insurance market continued to record strong performance, against the backdrop of a prolonged soft market and the effects of the worst financial crisis in a generation.

Latest available figures show that Bermuda’s insurers had aggregate total assets of USD472.9bn, which represents a 7% increase over the USD442.2bn achieved the previous year. Gross premiums written totaled USD123.5bn, achieving the similar volume of business of USD124.4bn written the previous year, despite the challenging economic conditions. Of that total, the commercial sector wrote USD103.4bn in gross premiums written. Bermuda’s captive sector also maintained significant results, reporting USD19.6bn in gross premiums written.

Jeremy Cox, CEO of the Authority, said: “We’re pleased to see that the commercial sector remains strong. In addition, the almost USD20bn in gross premiums written by the captive sector in a soft global market, and the total number of 885 Bermuda captives, supports Bermuda’s position as the leader among captive domiciles.”

“While some companies did experience losses over the past year impacting capital levels, the market still remains highly capitalized and these losses were primarily related to impairments within their investment portfolios, in line with global trends.”

“Overall, these results indicate the continued resilience of the Bermuda market, and ongoing confidence in Bermuda’s position as a leading center for insurance and reinsurance business globally.”

Incorporations increased slightly during 2009: a total of 42 new (re)insurers were established in the Bermuda market during the year, as compared to 40 in 2008. Most of the new market entrants for 2009 were a combination of captive and commercial insurers within the Class 3, 3A and 3B sectors. The companies covered various lines of business, including property and catastrophe and professional liability; there was also increased interest from the life insurance sector, which in turn brought increased assets and new capital to the market. The greatest proportion of business came from the US during the year, with respect to both the captive and commercial markets.

Concluding, Cox added: “We are pleased to see that Bermuda continues to attract high-quality business, looking for experienced business support in a well-regulated environment. In addition, the continued disciplined underwriting by Bermuda firms throughout the year, as well as the Authority’s proactive and measured approach to supervision, has assisted the jurisdiction in weathering a tough financial storm.”

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