The Bermuda insurance market was characterised by underwriting restraint and increased security in 1997, according to statistics for the year released by the Registrar of Companies.

The figures show that the Bermuda market had total net premiums written in 1997 which grew three percent to $20.4 billion, compared with a 14 percent increase in capital and surplus to a new high of $48.4 billion. Total assets increased by $11.9 billion to $111.8 billion.

The Island's captive business showed its strength in the industry as reflected in statistics for Class 1, Class 2 and Class 3 companies. About $2 billion of new capital and surplus flowed into companies classified as Class 1 and Class 2 companies. Combined capital and surplus of the two classes rose to $18 billion while combined net premiums was $4.8 billion, down slightly from 1996.

Class 1 insurers net premiums written increased six percent to $1.8 billion, while total assets fell one percent to $11.6 billion. Capital and surplus rose 13 percent to $5.4 billion.

Class 2 insurers had a drop of 17 percent to $4 billion in net premiums, while total assets increased 14 percent to $28.9 billion. Capital and surplus stood at $12.6 billion an increase of 10 percent.

Class 3 companies -- finite risk reinsurers, rent-a-captives, agency captives, commercial carriers and captives deriving more than 20 percent of net premiums from unrelated risks -- also showed strong growth. During 1997, the capital and surplus rose 21 percent to about $20 billion. Net premiums rose 22 percent to $10.4 billion, while total assets rose 17 percent to $49.2 billion.

Meanwhile, excess liability and property catastrophe reinsurance companies, classified as Class 4, had a seven percent drop in net premiums to $2.8 billion. Total assets rose seven percent to $17.6 billion and capital and surplus rose six percent to $9.4 billion.

Registrar of Companies Kymn Astwood stated the balance sheets of the companies were "impressive'' during 1997.

"Due to the newness of our commercial market, Bermuda is both well capitalised and unencumbered by some of the past problems other markets have had to deal with in the 1990s,'' he stated.

Mr. Astwood also praised the industry for maintaining what he said was "pricing integrity in the face of rate softening internationally''.

The latest statistics point to an industry-wide premium to capital surplus ratio of 0.42 to one in 1997 compared to 0.47 to one in 1996.

"Security and creativity are the twin engines for our industry's growth, not the availability of cheap capacity,'' he said.

Insurance Advisory Committee chairman Robert Steinhoff said the results reflected the success of a regulatory framework that provided for innovation and attracted capital from the world insurance and capital markets.

Kymn Astwood BUSINESS BUC