Bermuda earnings hit $11.6 billion in 2006Posted On: Mar. 23, 2007 12:00 AM CST
LONDON--The Bermuda reinsurance market reported record earnings in 2006, generating $11.6 billion in net income vs. a $2.1 billion loss in 2005, according to a report by London-based reinsurance intermediary Benfield Group Ltd.
The report, "Benfield Bermuda Quarterly--Full Year 2006--Capital Returns," said in addition to a light year for catastrophes in 2006, significant releases of the prior year's loss reserves--notably for U.S. casualty business written since 2002--contributed to the net income growth.
Bermuda's aggregate combined ratio decreased in 2006 to 86.3% from 116.6% the prior year, according to the report. Record investment income also boosted profits, generating a record aggregate return on equity of 20.1%.
The report said more than $3 billion of equity and loan capital was raised to finance Bermudian sidecars in 2006, with most formed to support catastrophe risk in North America, although other risks were encompassed.
In addition, five new companies formed in Bermuda last year and raised $1.1 billion in capital, which accounted for about half of the total capital invested in startups globally during the year.
Copies of the report are available on Benfield's Web site at www.benfieldgroup.com.