The Bermuda Composite’s retention ratio has been relatively flat since 2005. It peaked in 2004, capping a period of rapid growth that began in 2001. A sellers’ market in the early years of this decade likely pushed the retention ratio higher. Currently, shortages of retrocession capacity at a market-clearing price are among the factors impacting the retention of premium. This trend will be more evident in 2009 as retrocession capacity and sidecar facilities remain tight.
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