Bermuda reinsurers report good year in 2006

Supply shortages, low catastrophe losses and buoyant investment income resulted in record first-half profits of US$4.5 billion for Bermuda’s reinsurers, according to the latest Benfield Bermuda Quarterly report.

Modest catastrophe losses held the average combined ratio to 89.2%, little changed from the 89.3% for the first six months of 2005, Benfield said.

“Reserve strengthening of over US$600 million for Hurricanes Katrina, Rita and Wilma was more than offset by the release of reserves for other classes of busines,” Benfield said.

Average annualized return on equity was 18.6%, compared to 17.3% for the same period in 2005.