Gross written premiums in Bermuda’s insurance sector declined 10% year on year, according to the latest statistics.
The island’s regulator, the Bermuda Monetary Authority (BMA), said this is proof the market is successfully addressing global market conditions. BMA figures show the market recorded gross written premium of $107.7bn, compared with $119.7bn 12 months earlier, which was “not surprising”, given the challenges of the prolonged soft market, Shelby Weldon, director of insurance, licensing and authorisations at the BMA, said.However, Bermudian carriers collectively posted year-on-year increases in aggregate total capital and surplus ($185.2bn) and assets ($524.7bn) of 1.7% and 5.8% respectively.
“The latest available statistics show the Bermuda insurance market achieved significant premium volumes and healthy amounts of assets and capital and surplus,” Weldon added.
“Last year was certainly a challenging one, which was reflected in the year-end results of some firms. However, Bermuda’s insurers are successfully addressing global market conditions.
“Also, Bermuda’s commitment to achieving equivalence with relevant standards globally continues to attract quality businesses that see the benefits of being based in a practical, first-league regulatory environment that is well regarded in key international markets.”
Looking at the market’s business volumes by sector, commercial premiums were almost flat year on year at $86.3bn, compared with $87.1bn the previous year.
Total assets in the commercial sector came to $438bn, up 16.5% year on year. Capital and surplus was also up, rising 10% to $145.6bn.
“Bermuda captives also maintained high business volumes and there were a total of 862 captives registered in Bermuda at the end of 2011, up from 845 in 2010,” Weldon added.
Gross premiums for captives were down significantly at $21.4bn, compared with $32.7bn in 2010. Weldon attributed this change to a combination of the regulator’s continuing reclassification of a number of companies to reflect their risk-profiles more accurately, as well as a decrease in premiums written by particular firms within the sector.
“Bermuda’s insurance market continues to manage the impacts of the global economy and market conditions effectively,” Weldon concluded. “Bermuda is a unique jurisdiction providing leadership across the spectrum of insurance risk management: captives, insurance and reinsurance.
“This reinforces Bermuda’s position as a leading domicile for insurance business, along with other core elements of our success, such as disciplined underwriting by firms and a pragmatic regulatory environment with world-class standards that supports quality business.”
The BMA’s underwriting statistics for its insurance sector are quoted from carriers’ statutory financial returns for 2010.
Earlier this year, the regulator revealed a 50% annual increase in the number of new carriers setting up operations on the island, with this growth being spearheaded by special-purpose insurer (SPI) registrations (Insuranceday.com, Jan 13)
At year-end 2011, 54 new insurance entities had been registered, compared with 36 in 2010.
SPI registrations accounted for a significant majority of the increase, with 23 new insurers of this nature setting up in Bermuda over the course of 2011, compared with eight in 2010.
Further prospects for raising capital in the present economic climate and the vehicles that are being favoured by investors will be one of the many subjects on the agenda at this year’s Insurance Day Summit Bermuda, which will take place on the island over June 12 and 13 at the prestigious Fairmont Hamilton Princess Hotel.
Former BMA chief executive Matthew Elderfield, now deputy governor at the Central Bank of Ireland, former National Association of Insurance Commissioners president, Alessandro Iuppa, now senior policy adviser on global issues at Zurich, RenaissanceRe chief executive, Neill Currie, and former XL leader Brian O’Hara are the latest speakers to be confirmed to appear on the Insurance Day stage, joining a host of other industry chief executives in debating the major issues affecting the sector.