S&P Reports on 5 Bermuda Property Catastrophe Reinsurers

Standard & Poor’s Ratings Services has issued a report, entitled “Peer Comparison: Bermuda Property Catastrophe Reinsurers,” which examines the differences between five of the island’s reinsurers. S&P said the five share “a history as focused providers of short-tail property catastrophe reinsurance, based on their ability to assess and model for multiple events at a time when storm frequency, coastal populations, building values, and inflation are all rising.”

S&P found that Hannover Re Bermuda Ltd. “leads four of its peers in Bermuda’s rapidly changing property catastrophe reinsurance sector.” It ranks the companies as follows: HRB (Hannover), IPCRe Ltd., DaVinci Reinsurance Ltd., PXRE Reinsurance Ltd., and Montpelier Reinsurance Ltd. S&P noted that in its peer comparison reports, it “ranks insurance companies according to their strengths and weaknesses in seven categories: competitive position, management and corporate strategy, operating performance, capitalization, liquidity, investments, and financial property/casualty reinsurers based on their ability to manage volatility risk through their own risk management tools and underwriting capabilities.”

The report focuses on lessons learned in 2004, when, it notes, “new records were set for storm-related damages in a single year by four hurricanes–Charley, Frances, Ivan, and Jeanne–that made landfall in the U.S., a devastating tsunami that hit the Indian Ocean, and 10 typhoons that hit Japan. Less than a year later, these catastrophes are already driving change in a reinsurance line that is characterized by high profits and high volatility.”

The report is available to subscribers of RatingsDirect, S&P’s Web-based credit research and analysis system, at: www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-9823 or sending an e-mail to: research_request@standardandpoors.com. Ratings information can also be found on S&P’s public Web site at: www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Find a Rating, then Credit Ratings Search. All Standard & Poor’s research information is accessible for 24 hours after publication on the public Web site.