New BMA report claims Bermuda’s reinsurers well placed

A new report by the Bermuda Monetary Authority (BMA) claims that Bermuda re/insurers remained profitable and well capitalised in 2016, despite soft pricing, an abundance of capital and competition from the insurance linked securities market.

The BMA said that it wrote the Macroprudential Risk: Annual Statutory Filings Report to enhance its macroprudential surveillance function, increase transparency, and highlighted the size and the importance of the Bermuda commercial insurance market.

“The report complements the Catastrophe Risk Report by delving deeper into key industry ratios while readers can find a wealth of information that will be useful for understanding the dynamics of Bermuda’s reinsurance market,” said Nikolaos Georgiopoulos, a member of the financial stability unit at the BMA and who oversaw the production of this report. “It also shows the amount of risks taken by Bermuda commercial insurers as well as the amount of claims paid to the rest of the world.”

According to the BMA report, Bermuda’s large commercial re/insurers recorded a higher net income in 2016, (an increase of 13.7 percent) and an expanding asset base (an increase of 16.4 percent) year-on-year (y/y).

Net written premiums increased by 5.9 percent y/y while the expense ratio dropped by 5.0 percent. The combined ratio rose by 2.7 percent while total claims increased by 12.7 percent, reaching $19.8 billion.

Liquidity conditions improved during the year as the share of “BBB-AAA” rated bonds relative to claims increased by 5.7 percent.

The BMA report aggregated 2016 annual Capital and Solvency Return (CSR) filings from Bermuda’s Class 4 and 3B commercial re/insurers.