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Bermuda re/insurers’ supplied nearly half f Lloyd’s capacity in 2019 and has paid $35.2 billion to UK policyholders and cedants in the last five years, the Bermuda Monetary Authority (BMA) revealed yesterday.
The regulator’s most recent claims survey shows payments made for UK claims for large catastrophes, P&C losses, and life insurance between 2016 to 2020 were almost as much as those from the 20 years before: $35.2bn, against $36.8bn from 1997 to 2016. Annual payments continue to rise steadily, up from $5.2bn in 2016 to $8.8bn in 2020
In total, over both periods, Bermuda has paid UK policyholders and cedants over $65bn.
Most of the recent $35.2bn losses relate to property and casualty, which accounted for $25.7bn of claims. The rest, $9.5bn, was attributable to life insurance.
Bermuda had “embraced the role of being a global solutions provider in areas ranging from narrowing the protection gap arising from climate change to supplying capacity that populations around the world require for retirement”, according to commentary from the BMA.
Craig Swan, BMA deputy chief executive officer, said: “The Bermuda and UK re/insurance markets are vital to the supply of global risk capacity and are prominent in their own right. However, when these two markets converge, their synergy and complementary access produce outsized results that benefit the global economy. This can be seen by Bermuda re/insurers’ supply of nearly half of Lloyds of London syndicates’ capacity in 2019.
“The key role that Bermuda plays in the supply of risk capacity to the UK makes a notable contribution to a thriving London re/insurance market.”
The $65bn in UK losses paid since 1997 by Bermuda re/insurers reflected the market’s resilience, added Gerald Gakundi, BMA director of insurance supervision.
“This resilience is underscored in the results of a joint stress test exercise on natural catastrophes and economic scenarios for property and casualty insurers conducted by the BMA and the UK’s Prudential Regulatory Authority in 2019,” he added.
“The ability of UK re/insurers to cede risk to Bermuda enables diversification of risk globally, making the cost of buying insurance more affordable to policyholders and significantly lowering the insurance protection gap. The additional capital and sophisticated risk and asset management from Bermuda’s life reinsurance market continue to enable UK insurers to meet the promises made to their policyholders.”
BMA, Climate Change, P&C, Catastrophe, Insurance, Reinsurance, Craig Swan, Gerald Gakundi, Bermuda