Bermuda’s reinsurance market may be showing early signs of a pivot, with casualty lines and new capital structures gaining prominence as property pricing comes under pressure.

Hamilton Insurance Group’s first-quarter update points to a shift in where growth is coming from. While its Bermuda platform recorded a modest 5 per cent increase in gross premiums, this was driven primarily by casualty reinsurance, with property business broadly flat when adjusted for prior-year catastrophe impacts.

After several years of sharp rate increases, property catastrophe reinsurance is entering a softer phase, with ample capital and relatively mild losses putting pressure on pricing. In North America, property-cat reinsurance rates fell 20 per cent year-over-year at April 1, according to recent reports.

However, on Hamilton’s first-quarter earnings call, Pina Albo, group chief executive, said: “While pricing levels deteriorated, they were still risk adequate and structures, terms and conditions remained largely intact.”

Against that backdrop, reinsurers are becoming more selective. Hamilton said it had pulled back from areas where returns no longer met its thresholds, emphasising that “growth for growth’s sake is not the objective,” according to Ms Albo. “Margin preservation matters far more.”

She said the company was “disciplined in binding only those risks that met our underwriting and pricing requirements” and is “being more selective in many lines”.

The result, she said, is a shift towards longer-tail casualty business, where pricing is more stable and underwriting margins are still attractive.

The pivot also involves changes in how capital is deployed. Last month, Hamilton launched a new casualty reinsurance sidecar, expected to deploy about $300 million of capacity over several years.

“This structure allows Hamilton to support targeted casualty reinsurance growth while providing us with an additional source of fee income,” said Ms Albo.

Sidecars and insurance-linked securities structures have traditionally been focused on property cat risk, but Bermuda’s market is evolving.

Gallagher Re has noted that while cat bonds are still the dominant format for ILS, investors are now exploring sidecars and similar vehicles to access underwriting risk beyond that.

“Significant numbers of investors are now exploring vehicles such as reinsurance and insurance sidecars,” the broker said in a recent statement, adding that these structures are “of growing interest to cedants as an alternative route to reinsuring casualty lines … in contrast to bond markets that remain largely focused on property catastrophe risk.”

From an investor perspective, Gallagher Re added, sidecars are less liquid than cat bonds but can attract specialist capital seeking a “complexity premium”.