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Bermuda Insurers Remain Well Capitalized

by Mike Godfrey, Lowtax.net, Washington
30 November, 2017

Bermuda (re)insurers remained profitable and well capitalized in 2016, according to a new report by the island's financial services regulator, the Bermuda Monetary Authority.

The "Macroprudential Risk: Annual Statutory Filings Report" says that, despite soft pricing, and an abundance of capital and competition from the insurance-linked securities market, Bermuda's large commercial (re)insurers recorded a higher net income in 2016 (increasing by 13.7 percent), with an expanding asset base (an increase of 16.4 percent) year-on-year.

Net written premiums increased by 5.9 percent year-on-year, and insurers' expense ratio dropped by five percent. The combined ratio rose by 2.7 percent, while total claims increased by 12.7 percent, reaching USD19.8bn. Liquidity conditions improved during the year as the share of "BBB-AAA" rated bonds relative to claims increased by 5.7 percent.

Nikolaos Georgiopoulos of the Authority's Financial Stability Unit, who oversaw the production of this report, commented: "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. 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."

The purpose of the report, which can be found on the Authority's website, is to enhance the regulator's macroprudential surveillance function, increase transparency, and highlight the size and importance of Bermuda's commercial insurance market.

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