Bermudian insurance and reinsurance companies have been severely hit by 2008 investment losses and capital depletion, according to a briefing published today by reinsurance broker Guy Carpenter. Capital for the Guy Carpenter Bermuda Composite, which comprises 19 companies, fell 16% last year.
Gross and net written premiums both fell 1%. Gross written premiums fell to $41.1bn, with reinsurance gross written premiums falling 6.7%. Insurance premiums, however, increased 8.8%
The group posted an aggregate comprehensive net loss of $7.8bn for 2008, driven by $10bn of investment losses. However, 15 of the 19 companies in the group posted underwriting profits. The five-year rolling average return on equity for the group fell to 8.7%.
The group's combined ratio increased nine points to 94.6%, but was only below 100% because of reserve releases. The combined ratio was 85% in 2007 and 84% in 2006.
"Though capital levels declined for the first time in half a decade, Bermuda companies still entered 2009 sufficiently capitalised, largely as a result of their robust performance in preceding years and their traditionally cautious underwriting stance," said Chris Klein, managing director global head of business intelligence at Guy Carpenter, in a statement. "At the same time, the depletion of capital comes at a time when it is hard to replace, and this warrants attention as we move further into 2009."