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The Bermuda reinsurance industry is without doubt a hardy one. Buffeted from side to side by the stormy winds of the global financial crisis, the market has now entered a period of calm in which we are starting to see a few signs of recovery. Capital levels are high, the result of strong underwriting and good investment decisions, and the Island is still attracting a number of new entities.
Of course, there have been casualties. As we learn in the Ernst & Young conference overview (page 42), the casualty market is currently ‘under stress’ due to the effects of the current soft market and record low interest rates. But discipline within the industry has always been good, and by keeping their house in order through a reduction in volume and stepping back from non-essential business, companies are finding ways to survive.
This can-do approach will undoubtedly help them respond to the guidelines being presented by the Bermuda Monetary Authority (BMA), as it embarks on the journey to lead the Island to Solvency II equivalency regulation. The BMA welcomes a new chief executive officer (page 6), who believes that a key path to success will be to engage the industry as a whole in his quest
for compliance.
It remains to be seen how well the BMA does, as it’s scheduled for 2012, but one group who will be watching developments closely are the brokers, who discuss the state of the casualty market in a new series of brokers’ reports, in which they are invited to discuss a market-relevant issue.
We also hear the views of chief financial and chief investment officers. They feature in our survey in which we ask them to outline their company’s investment strategies (page 12), with reference to how the current climate may have affected their decisions. Two roundtable discussions delve further into topics occupying reinsurers, such as the changing regulatory environment, the change in accountancy principles, and the state of the Middle East and North African market.
But though the industry is recovering its footing, our feature on page 48 notes that one thing has changed for good: the easy access to money. Banks are understandably wary to lend, but there may be a solution, according to one commentator. It seems clear that the industry is very adept at finding solutions.
View the Feb/March 2010 Issue Here
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