Bermuda Provides Pivotal Reinsurance Capacity to the United States

Over the past 20 years, Bermuda reinsurers have paid out $208.7 billion to US policyholders and cedents for large catastrophes, related property insurance, and general liability losses, according to commercial market claims data collected by the Bermuda Monetary Authority (BMA).

• From 1997 to 2006, claims payments to US policyholders and cedents totaled $56.0 billion.
• Between 2007 and 2016, this increased significantly to $152.7 billion.

More recently, the devastating 2017 Hurricanes Harvey, Irma, and Maria (HIM) led to recorded estimated losses of $31.2 billion net of reinsurance costs for Bermuda reinsurers. Of this amount, the United States and Puerto Rico accounted for $30.6 billion net.

Based on publicly available catastrophe loss estimates, Bermuda reinsurers will be picking up 30 percent of the Harvey, Irma, and Maria losses from this record-setting hurricane season. This information comes from the BMA's first US Data Claims Survey, completed earlier this month. The loss information includes both direct insurance and reinsurance. A total of 250 companies responded to the survey, including commercial insurers, reinsurers, alternative capital entities, and insurance-linked securities funds.

Craig Swan, BMA's managing director, supervision (insurance), said, "The $30 billion or 30 percent of US losses paid by Bermuda re/insurers demonstrates the key role Bermuda plays in the supply of risk capacity to that country. In fact, the survey results show the significance of the Bermuda re/insurance market's contribution to the US over the past 2 decades. US insurers cede risk to Bermuda, diversifying that risk globally, making the cost of buying insurance—particularly property/catastrophe insurance—more affordable to customers living in US danger zones."

According to Standard & Poor's Global Reinsurance Highlights 2017, 13 of the top 40 global reinsurance groups ranked by net premiums written are domiciled in Bermuda and regulated by the BMA.