Bermuda’s large commercial insurers delivered another year of strong profitability in 2024, even as liquidity across the sector showed signs of tightening, according to the Bermuda Monetary Authority’s latest macroprudential review.

The report, based on aggregated statutory filings from Class 3B and Class 4 commercial insurers and reinsurers, shows that profitability and returns improved last year, continuing a rebound from weaker conditions earlier in the decade.

Key financial indicators “improved again in 2024, continuing to exceed returns in prior years”, the BMA said.

Net income rose sharply year-on-year, supported by higher investment income and underwriting discipline. Returns on equity and assets remained well above historical norms.

Premiums continued to grow at a moderate pace, while total assets and capital also increased and strengthened balance sheets for a second consecutive year.

However, the BMA flagged a softening in liquidity. Buffers that had built up during earlier hard-market conditions are starting to erode, it said.

“Liquidity conditions decreased during the year as the share of BBB-AAA-rated assets relative to claims reduced to 375.6 per cent of assets as a proportion of claims, down from 412.4 per cent in 2023,” the authority said.

The report suggests that the decline stems from a combination of rising claims, higher expenses and shifts in asset allocation.

Overall liquidity levels were still high by international standards, however. Cash coverage against claims and liabilities also moved lower over the year.

Claims grew in 2024, driven in part by catastrophe activity, while expenses also rose, contributing to a slight worsening of the combined ratio. Despite this, underwriting results remained solid, and investment performance improved, thanks to higher yields.

The BMA noted that global insured losses exceeded $130 billion during the year, while Bermudian-based insurers still managed to absorb the shocks.