With alternative capital showing sustained steady growth within the global reinsurance market, Bermuda’s share of total capacity was $51.9 billion, or approximately 58%, according to a report by The Bermuda Monetary Authority.
As a whole, industry estimates placed alternative capital at approximately $89 billion, or about 15% of overall global reinsurance capital (up from $81 billion, or 14% of global reinsurance capital, in 2016).
Craig Swan, Managing Director, Supervision, (Insurance) said the steady growth of alternative capital within the Bermuda insurance market, particularly following the 2017 losses from Hurricanes Harvey, Irma and Maria, indicates that Bermuda continues to be a trusted centre for insurance risk securitisation.
“The aggregate exposure of non-life re/insurers backed by alternative capital was approximately $51.9 billion at year-end 2017 while gross written premiums was $3.9 billion,” Swan said.
According to the report, assumed risks were split across nine lines of business covering four major geographical regions.
Property catastrophe (including property retrocession) was the biggest line of business written, representing approximately 94% of Gross Written Premium while the U.S was the largest risk region, representing 40% of aggregate limits covered.
While alternative capital arrangements are used in a number of ways, two structures dominated the Bermuda market place as at 31 December 2017: catastrophe bonds and collateralised reinsurance with $18.9 billion (36%) and $28.5 billion (55%) of capacity, respectively.
