June 17th, 2009

Net Income Drops for Bermuda Reinsurance Composite

Posted at 1:30 AM ET

Christopher Klein, Global Head of Business Intelligence
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The Guy Carpenter Bermuda Reinsurance Composite posted an aggregate net loss of USD325 million for the first quarter of 2009. This is down from a net gain of USD558 million (after unrealized gains and losses) for the first quarter of 2008. As with the global and European trends, realized investment losses were the primary reason.

[Chart after the jump]

gc-reinsurance-bermuda-comp-source

For the first quarter of last year, the Bermuda Reinsurance Composite posted a small realized investment gain of USD5 million. This year, the result was a USD6.1 billion net loss. But, unrealized losses contracted by 39 percent to USD3.2 billion, in part because of tightening bond spreads. Three of the 17 companies in the Bermuda Reinsurance Composite reported losses after unrealized investment gains and losses.

Underwriting results weakened year-over-year for the Bermuda Reinsurance Composite, as well, despite prior years’ reserve releases.

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