Bermuda Summit - Market dynamics.

(From Reinsurance)

Byline: David Worsfold.

Bermuda sees itself as a vibrant, creative market, prepared to be flexible in meeting the challenges facing the global reinsurance market but at pains to reject charges that the new capacity is naive, or worse, irresponsible. That was a recurring message at the third Reinsurance executive summit which took place in the Bermudian capital Hamilton, last month.

There was plenty of agreement around the table about the headline trends in the reinsurance market: property rates coming off the top, along with aviation, but a continuing firmness in the main casualty classes. Whether the overall position constituted a hard market, however, was the source of some debate. "Adequate" rates were not necessarily "hard" rates as they were doing little more than replenishing the coffers after several years of substantial pay-outs against a background of clearly inadequate rates. The challenge was to produce a proper and consistent return to shareholders.

Meeting this challenge would be easier for those with fresh capacity and no baggage from the past, who would frequently have to use any new capital they could raise to boost reserves rather than support new business.

This is where the opportunity lay for several of the reinsurers round the table.

No quick fix