Bermuda's (re)insurance market in 2012

Tim Faries, a partner and group team leader of the insurance division within the corporate and commercial department of Appleby, Bermuda, looks back at an eventful year for the island’s (re)insurance market.

As November 2012 drew to a close, catastrophe modelling firms were releasing their latest insured loss estimates from Hurricane Sandy, punctuating with an exclamation mark what has been a year of victories and challenges for the Bermuda market.

Cat modeller AIR Worldwide revised upward its loss estimate for Sandy to $16 - 22 billion, while Eqecat remained at $10 - 20 billion and RMS looked set to move north to the $20 - 25 billion range. Based on the insured loss estimate development of other major US storms such as Katrina and Andrew, further upward momentum in these estimates is likely in the coming weeks.

Sandy was the first major cat event in what has been a tranquil year for the worldwide catastrophe reinsurance marketplace; a marked, and welcome, contrast to 2011, which was a record year for cats. While it is still too early to tell how much of this loss will be borne by the traditional Bermuda cat re market, there is
much speculation on the impact the storm will have on nontraditional Insurance Linked Securities (ILS) products. $20 billion is a key trigger for Industry Loss Warranties (ILWs) and price volatility in cat bonds, with downward movement being the primary feature, has characterised the Swiss Re Global Cat Bond
Performance Price Return Index post-Sandy. Since the introduction of its Special Purpose Insurer (SPI) category in 2009, Bermuda has vaulted into a prominent position in the ILS business, and developments in this area will undoubtedly have an impact on the Bermuda market…

If you are registered and logged in to the site, click on the link below to read the rest of the Appleby briefing. If not, please register or sign in with your details below.

Sign in or Register to continue reading this article

Sign in

Register

It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer

 

Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.

 

Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.

 

Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Briefings from Appleby

View more briefings from Appleby

Analysis from The Lawyer

View more analysis from The Lawyer

Overview

1st Floor
3 Copthall Avenue
London
EC2R 7BH
UK
http://www.applebyglobal.com

Total staff: 528
Partners: 64