NU Online News Service, March 14, 11:26a.m.

Although Bermuda insurers and reinsurers were hit with more than$3.5 billion in catastrophe losses from worldwide disasters in2010, roughly $2.7 billion in favorable prior-year loss developmenthelped cushion the blow, according to NU tallies.

The Monday, Mar. 14 edition of National Underwritermagazine features a Bermuda Market Update, which includes a compilation of year-end income and underwritingresults. The financial results summary reveals that thatcombined ratios for a group of 17 Bermuda companies averaged 91.5for 2010—a deterioration of roughly 9 points from the 82.6 overallcombined ratio reported for the same group in 2009.

Separately, NU has tallied both thecatastrophe loss figures and loss reserve takedowns for 16 of the groups that reported themin their year-end financial reports and filings with the Securitiesand Exchange Commission.

According to these reports, catastrophe losses for 16 Bermudagroups analyzed by NU totaled $3.6 billion in 2010, adding11.2 points to the overall combined ratio for the cohort, whilemost companies reported much smaller levels of profit damage fromcats in 2009.

The groups suffered 2010 losses from a first-quarter earthquakein Chile, the Deepwater Horizon disaster, a third-quarter NewZealand quake and fourth-quarter floods in Australia.

These same companies reported prior-year reserve takedowns of$2.7 billion, shaving more than 8.4 points off the overall 2010combined ratio.

In 2009, the prior-year reserve benefit was lower, coming in at$2.5 billion, representing 7.7 combined ratio points.

Among the classes of Bermuda companies, the “Class of 2001”reported the largest combined ratio impact from favorableprior-year loss development—9.8 points, but this was also the onlyclass to see a smaller benefit in 2010 than in 2009. In 2009, the“Class of 2001” companies— formed in the wake of 9/11—reported 10.6points of favorable prior-year development.

Three “Class of 2005” companies—Flagstone Re, Validus andLancashire Insurance—formed in the wake of Hurricanes Katrina, Ritaand Wilma, reported the least amount of prior-year reservebenefit—just 8.3 points in 2010 and 6.1 points in 2009.

Older Bermuda companies included in the group tracked byNU suffered a 16- point combined ratio hit from 2010 catlosses in 2010, but favorable development shaved 7.9 points offtheir 2010 combined ratios overall, compared to 6.3 points in2009.

Prior to the recent earthquake and tsunami event in Japan,Bermuda reinsurers were already releasing estimates of 2011 catlosses from this year’s New Zealand quake, Cyclone Yasi and floodsin Australia. The range of preliminary estimates of losses fromthose events announced by eight Bermuda companies is $605million to $865 million.