Bermuda reinsurers showed Q1 profits, despite softening market

Bermuda reinsurers continued the 2006 trend of bolstering balance sheets with record profits during 2007 Q1, according to the Benfield Bermuda Quarterly report, despite a softening market.
According to Benfield, light losses and reserve release helped Bermuda’s 16 leading reinsurers produce US$3.1 billion [approximately Cdn$3.3 billion] in aggregate net income and raise the island’s capital base to US$66.6 billion [approximately Cdn$71 billion].
Despite a generally softening market, underwriting discipline and increasing client retentions slowed top-line growth, noted the researchers.
At US$17.3 billion [approximately Cdn$18.45 billion], total premium written was 1% lower than the same period in 2006 despite efforts by some companies to write more Q1 premium in expectation of weaker June 1, and July1, renewals, said the report.
“The general consensus described a drifting market with rates falling between 5% and 15% overall,” said Leon Janeke, a member of Benfield’s industry analysis and research team, in a Benfield release.
“Despite the softening environment, many attractive opportunities remain for writing technically profitable business and Bermuda’s reinsurers appear confident ahead of the 2007 hurricane season,” he added.
The report also noted that legislative changes in Florida appeared to be less of an issue than initially feared.