Fitch Reports on Bermuda Insurance, Reinsurance Market

March 4, 2008

Fitch Ratings has released a new “Special Report” examining the state of Bermuda’s insurance and reinsurance industry, which concludes that it “continues to develop as a thriving domicile for (re)insurance organizations, attributable to an attractive regulatory and tax environment, an accumulation of investment capital and underwriting talent, and innovative approaches to risk management.”

Fitch also indicated that the report “delves into the agency’s first discussion of a separate Rating Outlook for this market.”

The Special Report “outlines the Bermuda market’s key characteristics, identifies challenges expected to have an impact on the market in 2008, and discusses Fitch’s 2008 financial projections for the market,” said the bulletin.

It also “introduces Fitch’s Bermuda market aggregate index, a group of Bermuda-based (re)insurers that are important components of the Bermuda (re)insurance market, and provides Fitch’s first discussion of a separate Rating Outlook for the Bermuda market.”

Among the more significant conclusions contained in the study, Fitch notes that, although the “market has enjoyed this tremendous operating success in the past two years, Bermuda (re)insurers will face significant pressure on profitability going forward as property/casualty insurance pricing continues to trend steadily downward.

“Key near-term challenges facing the Bermuda market include managing the execution risk derived from expansion strategies adopted by some market participants, coping with the market’s unique infrastructure challenges, and retaining financial and competitive advantages derived from the island’s tax status.”

The Special Report, ‘Bermuda Market Overview,’ is now available on the Fitch web site at:, under Financial Institutions > Insurance > Special Reports.

Source: Fitch Ratings

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