Charley Eats 18% Of Bermuda's Net

Charley Eats 18% Of Bermuda's Net

NU Online News Service, Sept. 7, 2:25 p.m. EDT?Early estimates of Hurricane Charley losses for the Bermuda insurance market indicate it will be the equivalent of 18 percent of the net income for companies on the island in the first half, according to a brokerage report.[@@]

That finding appeared in a study of 16 insurers in the Bermuda market performed by Benfield Group research. It also found most firms' management is optimistic that declining rates will not drop too steeply.

The research for the "Benfield Bermuda Quarterly Second Quarter 2004"
found that "most CEOs remain reasonably bullish about prospects for only a gentle ebbing of rates in the face of growing competition," Benfield reported.

The company said that the 16 firms reviewed had increased total premium income 21 percent to $30.3 billion. But researchers found growth decreased sharply from the 67 percent recorded in the first half of 2003.

Benfield found that in the first half of this year, the Bermuda groups' consolidated net income remained strong, increasing by 33 percent to $4.1 billion.

Researchers also noted that in the first six months, Bermuda firms were not forced to do the loss reserve strengthening that has hurt the bottom line of some European and U.S. companies.

Among the players in the Bermuda market, Benfield said ACE Ltd. was the largest with a 27 percent market share, followed by XL with 21 percent. In third place was White Mountains Insurance Group, which held an 8 percent share of the sector's gross premium written.

Benfield noted that despite signs that some segments of the casualty market were starting to soften, CEOs still feel that company underwriting was remaining disciplined and pricing was technically adequate.

Looking at company balance sheets, Benfield found that bonds were the principal class of investment, representing 45 percent of total assets, which was an increase of 2 percent on the previous 12 months.