Bermuda's insurance market continues to grow.

Global market forces had limited impact on the Bermuda Insurance Market's overall performance for the year 1999, as premium levels, total assets and capital and surplus in the industry showed modest growth.

New figures released by the Registrar of Companies, representing a final analysis of the preliminary statistics reported in the Bermuda Insurance Update Winter 2001 edition, show Bermuda's market growth came at the high end, and was characterised by developments with larger companies.

As was anticipated internationally, competitive pricing pressures continued although to a lessening extent, but the statistics reflect a Bermuda market that continues to resist pressure to chase rates downward. The focus has been on maintaining strong balance sheets and managing company assets with a conservative investment philosophy. This is reflected in a thirteen percent increase in total assets from $116.4 billion to $131.6 billion, and a six percent rise in capital and surplus from $51.2 billion to $54.4 billion.

Overall gross premiums written grew to just over $30 billion and net premiums increased twelve percent from $21.2 billion in 1998 to $23.8 billion.

Underwriting restraint and continued security remained a strong focus of the Bermuda market as the latest statistics point to an industry-wide premium to capital and surplus ratio of 0.44 to one.

It is also apparent from the statistics that the Island's captive insurance business, as reflected generally by Bermuda's Class 1 and Class 2 companies, suffered from a contraction in the volume of business written in 1999.

This was due in part to the re-registration of some of these companies into Class 3, and buyers continuing to seek out cheap commercial capacity that was prevalent in the traditional markets as an alternative to insuring their captives. The combined net premiums written of those two classes declined to $3.8 billion, while their combined assets finished the year at approximately $39.4 billion, up nine percent from 1998.

Another significant aspect of the Bermuda market in 1999 was the growth of the Class 3 sector of the market. Under Bermuda's multi-licence system of regulation, Class 3 companies include finite risk reinsurers, rent-a-captives, agency captives, commercial carriers and captives deriving more than 20 percent of net premiums from unrelated risks.

During 1999, the capital and surplus of Bermuda's Class 3 companies rose by $2.3 billion to finish at $24.3 billion up ten percent on the $22 billion recorded in this category in 1998 The balance sheets of Bermuda's Class 4 excess liability and property catastrophe reinsurers were impressive, even with the high frequency and severity of catastrophic events in recent years.

Total assets increased by nine percent to $23.6 billion from $21.7 billion in 1998, while capital and surplus declined slightly to $10.2 billion from the 1998 figure of $11 billion. Gross premiums written increased by $1.6 billion, up 59 percent from the $2.9 billion written in the previous year, and net premiums rose 43 percent to $3.3 billion. This growth reflects the initiatives of certain companies to expand geographic coverage and diversify products. As a whole Bermuda's Class 4 insurers remain some of the best-capitalised companies in the world with a premium to capital and surplus ratio of 0.32 to one.

Assets for long-term insurers moved 114 percent higher to $9 billion, from $4.2 billion in 1998, and capital and surplus for this category rose 111 percent from $0.9 billion to $1.9 billion. Net premiums written increased 25 percent to $3 billion from $2.4 billion in the previous year.

Registrar of Companies, Jeremy Cox said: "Bermuda insurers continue to grow at a modest rate and appear committed to expansion, while maintaining underwriting discipline. The Bermuda market even through challenging conditions has demonstrated an ability to shift resources strategically to benefit from opportunities that may exist in other major markets.'' Chairman of the Insurance Advisory Committee, Robert Steinhoff, described the Bermuda insurance industry as, "a market which continues to out-perform competitive markets''.

"Bermuda's Insurers, with their strong balance sheets, are well positioned to capitalise on the improving rates currently being experienced in the global reinsurance market,'' he said.

BUSINESS BUC