Bermuda's Catastrophe Bond Market Is Enjoying A Record Year

WILL THERE BE A CLASS OF '23?

Bermuda's catastrophe bond market is enjoying a record year, but Bermuda Managing Partner Brad Adderley probes why more new capital has not come into the hardest market in decades.

BERMUDA'S REINSURANCE INDUSTRY HAS BEEN CHARACTERISED BY A SERIES OF WAVES OF NEW COMPANIES FORMING IN RESPONSE TO SHORTAGES OF CAPACITY IN PARTICULAR SECTORS.

This began in the 1980s when excess of loss re/insurers ACE and XL were formed when capacity in this area dried up in the US, and was followed in 1992 when Hurricane Andrew led to an influx of catastrophe reinsurers. The 9/11 terrorist attacks in 2001 brought another wave of companies to Bermuda.

But in the current hard market—during which there has been probably the biggest and most sustained increase in rates since the early 2000s—there has not been a similar wave of incorporations.