From 2016 to 2020, Bermuda-based insurers and reinsurers paid out USD 29.3 billion to policyholders and cedants located in the European Union (EU), for both property and casualty (P&C) and life insurance claims, according to data collected by the Bermuda Monetary Authority (BMA) in June 2021.
Interestingly, the almost USD 30 billion of claims paid to EU clients over the five-year period compares with USD 35.9 billion paid to EU policyholders and cedants over the 20-year period from 1997 to 2016.
Combined, this takes the amount Bermuda re/insurers have paid to clients in the EU to more than USD 65 billion since 1997.
It’s worth noting that the BMA has excluded the UK from these figures following the Brexit vote and its subsequent departure from the EU.
Of course, Bermuda is known as a leading global hub for insurance, reinsurance, and insurance-linked securities (ILS) business, and the results of the BMA’s two surveys highlight the significance of the island’s contribution to the EU over this time.
What’s more, annual payments made by Bermudian firms to EU clients have risen steadily, from USD 4.4 billion in 2016 to USD 7.2 billion in 2020, according to the BMA’s commercial market claims data.
Of the total paid between 2016 and 2020, just under 80%, or USD 23.3 billion relates to P&C losses, with USD 6 billion, or more than 20% attributable to life insurance claims.
The BMA says that of the USD 29.3 billion total, around 22%, so roughly USD 6.5 billion was paid to customers in Germany. Other significant claims payments were distributed between Ireland, France, Spain, Italy, Belgium, the Netherlands, and Austria.
Gerald Gakundi, Director, Insurance Supervision, commented: “The roughly US$60 billion EU losses paid since 1997 by Bermuda (re)insurers demonstrates the key role Bermuda plays in the supply of risk capacity to the EU, and in supporting EU policyholders.
“The ability of EU insurers to cede risk to Bermuda enables diversification of risk globally, making the cost of buying insurance—particularly property and casualty insurance—more affordable to customers living in the EU.”
