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A.M. Best Special Report: Bermuda Insurers Carry Strength Into a Softening Market

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FOR IMMEDIATE RELEASE

OLDWICK, NEW JERSEY, U.S.A., Apr. 28, 2008—Bermuda based property/casualty insurers bounced back from two years of unprecedented hurricane losses to post strong results in 2006 and 2007, but industry fundamentals are expected to continue deteriorating. Meanwhile, financial results produce interesting comparisons between the performance of established carriers and newer ones.

• First quarter results provide reason to expect an acceptable rate of return in 2008, but margins will be lower than they have been in the past two years.
• The majority of Bermuda based carriers are financially strong, as the fundamental quality of underwriting leads to record earnings.
• The Bermuda market sample reported excellent combined ratios for 2006 and 2007 of 83.6% and 82.9%, respectively.
• Pressure on companies to lower rates and loosen terms poses a challenge to effectively manage capital.
• Cedants purchasing less reinsurance make the stability of earnings less certain.
• Insurers are approaching July renewals cautiously in a fragile marketplace.
• A.M. Best maintains a stable ratings outlook on the Bermuda reinsurance/insurance sector, with most actions likely to be affirmations.

BestWeek subscribers can download a PDF copy of all full special reports at no additional cost or a combination of the PDF copies plus all related spreadsheet files of the report data at no additional cost from our Web site at www.bestweek.com.

Nonsubscribers can download a PDF copy of the full special report (6 pages) for $55 or a combination of the PDF copy plus the spreadsheet file of the report data for $140 from our Web site at www.bestweek.com. Call customer service for more information, (908) 439-2200, ext. 5742.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

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