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With the results finally in, the perfect storm of 2011 didn’t disappoint. Combined ratios rose precipitously across the board, taking the industry average well above 100 percent. Industry net income fell sharply, while some Bermuda reinsurers edged into negative territory. Individual results and a brief analysis of how Bermuda players fared is outlined in ‘Still Standing’. 2011, it would seem, is a year most in the industry would rather forget.
While the lingering after-effects of 2011 and wider macroeconomic woes rumble on,
January at least brought some cheer for a cat-battered reinsurance sector. Upward rate rises were recorded on property cat lines affected by recent catastrophe losses, with significant, and much-needed, rate rises in international territories and smaller—but no less significant—increases achieved in the US.
Europe, meanwhile, remained fiercely competitive on price and with no cats to its name; those writing business on the continent had to contend with largely flat renewals in January. Casualty lines, for their part, remain stubbornly soft and although single-digit rate rises could be on the cards as we head deeper into 2012-2013, there seems little reason for cheer. A detailed look at the renewals and the major drivers of rate change are outlined in ‘Coming up for air’.
A troubled underwriting year wasn’t helped by the ongoing macroeconomic crisis in the eurozone, which still seems no closer to a final denouement. The implications of the crisis for Bermuda reinsurers and insurers are explored in European exposures, drawing together thoughts from our newly-formed editorial board.
Finally, in this edition we welcome the inaugural insurance-linked securities (ILS) section, which draws together a trio of articles examining the ILS market. The first, ‘A matter of balance’, examines the allure of ILS for reinsurers and takes a look at the health of the ILS market. The second, Structuring risk for the capital markets, is a discussion with CatVest, a firm that helps to model energy and chemical risks for the ILS sector. Finally, we talk to the Bermuda Stock Exchange about the continuing success of its offering, in ILS flock to the BSX.
View the Spring 2012 Issue Here
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