Reinsurers in Bermuda have paid out a stunning $209 billion in losses to U.S. customers since 1997, including around $31 billion for losses from the recent hurricanes, according to data collected by the Bermuda Monetary Authority (BMA).
The figure of $208.7 billion paid out to U.S. policyholders and cedants for losses from large catastrophes, related property insurance and general liability business over the past 20 years is derived from commercial market claims data surveyed from the Bermuda industry.
The BMA said that between 1997 and 2006 claims payments made by Bermuda reinsurers to U.S. policyholders and cedants totalled $56.0 billion, but the figure jumped dramatically between 2007 and 2016 to $152.7 billion.
Hurricanes Harvey, Irma and Maria (HIM) have resulted in $31.2 billion of losses net of reinsurance for Bermuda re/insurers. Out of this amount, the U.S. and Puerto Rico accounted for $30.6 billion.
As a result it looks like Bermuda’s reinsurance industry will be paying around 30% of the Harvey, Irma and Maria claims from the 2017 hurricane season.
The BMA collected this information from its first U.S. Data Claims Survey, which it completed earlier this month. The loss information includes both direct insurance and reinsurance. 250 companies responded to the survey, including both commercial insurers and reinsurers, as well as alternative capital entities and insurance linked securities (ILS) funds the BMA said.
Craig Swan, Managing Director, Supervision (Insurance) at the BMA commented, “The $30 billion or 30% of US losses paid by Bermuda (re)insurers demonstrates the key role Bermuda plays in the supply of risk capacity to that country. In fact, the survey results show the significance of the Bermuda (re)insurance market’s contribution to the US over the past two decades. US insurers cede risk to Bermuda, diversifying that risk globally, making the cost of buying insurance – particularly property/catastrophe insurance – more affordable to customers living in US danger zones.
“The Authority is grateful to the companies that took part in the survey. This data and the European Union (EU) claims data released in September (over $70 billion was paid out by Bermuda reinsurers to EU policyholders and cedants over the past 20 years) demonstrates the valuable role Bermuda plays in diversifying risk globally in an increasingly competitive world marketplace.”