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B Innc vy 2012with analysis by Standard & Poors
1 8 n n u l
The BermudaTop 10
2011 Wa a Recrd Yearfr CatatrpheIn 2011, a number o severe natural
catastrophic events that extracted a heavy toll
both in atalities, and economic and insured
losses hurt the property and casualty (P&C)
insurance and reinsurance industry. These
catastrophic events were not limited to asingle geographic region. They were spread
across the Pacic Basin and North America.
Munich Re estimates that in 2011 insured
losses due to natural catastrophes amounted
to $105 billion, which topped the prior
record o $101 billion in 2005. Since the
beginning o the prior hard market in 2002,the P&C (re)insurance industry has been
challenged by an increase in the requency
and severity o catastrophes, and the global
nancial crisis and economic downturn. In
act, 22 o the 40 most costly catastrophic
events o the past 40 years rom an insured
loss prospective have occurred in the past 10years.
BY Doug osRMillR nD ouik gRiB
By CapiTal & SurpluS ($000s)
1 C lmted 24,516,0002 Xl grp pc 10,769,4103 ParterRe ltd. 6,467,5424 Xis Capta d lmted 5,444,0795 rch Capta grp ltd. 4,628,4866 ReaaceRe d ltd. 3,608,5337 Vad d, ltd. 3,448,425
8 Cat grp lmted 3,297,7419 pe irace d lmted 3,172,00010 ed Wrd race Cmpay d, g 3,149,022By ToTal aSSeTS ($000s)
1 C lmted 87,505,0002 Xl grp pc 44,626,0773 ParterRe ltd. 22,855,3734 Xis Capta d lmted 17,806,0595 rch Capta grp ltd. 17,141,7696 Cat grp lmted 12,959,0077 ed Wrd race Cmpay d, g 11,122,1588 terra Capta d ltd. 10,185,8479 pe irace d lmted 9,485,00010 drace specaty d ltd. 8,292,615
By premiumS earned ($000s)
1 C lmted 15,387,0002 Xl grp pc 5,327,1123 ParterRe ltd. 4,647,7544 Cat grp lmted 3,611,6235 Xis Capta d lmted 3,314,9616 rch Capta grp ltd. 2,631,8157 veret Rerace (Bermda), ltd. 2,024,346
8 drace specaty d ltd. 1,931,3939 pe irace d lmted 1,889,00010 cx ltd. 1,837,736
By neT inCome ($000s)
1 C lmted 1,585,0002 rch Capta grp ltd. 436,3583 ed Wrd race Cmpay d, g 274,5484 lacahre irace Cmpay lmted 239,7005 veret Rerace (Bermda), ltd. 97,3596 terra Capta d ltd. 65,2827 Xis Capta d lmted 46,3058 Cat grp lmted 38,3979 cx ltd. 34,14110 o Caaty irace, ltd. 29,614
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Despite these challenges and the highly
competitive pricing environment in recent
years, Bermuda-based (re)insurers collectively
are strongly capitalized, and their capital
adequacy ratios are mostly redundant at their
respective rating level as o year-end 2011.
However, within the group some companiesare signicantly better capitalized or their
rating level compared with the median result,
while others have less o a cushion. Standard
& Poors Ratings Services views excess capital
as a strength, as it provides a cushion to the
inherent severity risk that most Bermudians
underwrite, and or possible modeling errors
when evaluating their catastrophe exposures.
The participants in our Bermuda Market
Survey reported underwriting capital (dened
as total debt plus shareholders equity) o
$103 billion and net premiums written o$54 billion or 2011. Despite the record level
o insured losses in 2011, underwriting capi-
tal or the survey participants was down less
than 2% rom the 2010 level o $105 billion.
This decline in underwriting capital resulted
rom management returning capital to inves-
tors through both dividends and repurchased
shares. Companies, or the most part, put
their share-repurchase activity on hold in
the second hal o 2011 because o the heavy
catastrophe losses during the rst hal o the
year. The level o share repurchasing in 2011
was 38% o the amount repurchased in 2010
by the survey participants. Repurchasing
shares has been an attractive way or publicly
listed companies to manage their valuation
metrics, especially because the survey par-
ticipants that are publicly listed have broadly
traded at a 15% to 25% discount to book
value during the past ew years.
As a result o the record level o catastrophe
losses in 2011, the survey participants report-
ed a combined ratio o 104%, which was 15
percentage points worse than in 2010a year
with a moderate level o catastrophes. How-ever, investment income, which represented
a 3.1% yield on invested assets, more than
oset the underwriting loss. During the past
ve years, investment income has contributed
between 6.5 and 10.8 percentage points to
the earnings beore interest and taxes (EBIT)
return on underwriting capitala com-
mon industry metric. This has been possible
because the size o the survey participants
invested assets was more than twice that o
their underwriting capital. In three o the past
ve years, the survey participants obtained an
EBIT return on underwriting capital o 15%
or more, whereas 2008 and 2011 were hurt
by the nancial crisis and record catastrophe
losses, respectively. The ve-year average
EBIT return on underwriting capital or the
survey participants was 12.1%.
We believe that several key challenges ace
P&C (re)insurers in 2012. First, P&C (re)
insurers generally maintain healthy capital
positions, which have contributed to the
competitive pricing environment. Pricing
changes in the reinsurance market have been
ragmented. Property-catastrophe treaties that
were loss ree in 2011 and global marine/
energy have experienced rate increases o
around 5%-10%. Loss-aected property-
catastrophe treaties experienced greater rate
increases, although they varied by region.
Rate activity on casualty treaties ranged rom
a 5% decrease to a 5% increase, and there
were no major reductions in capacity.
Recent updates to vendor catastrophe mod-
els have had a more muted eect on pricing
than the market expected. Changing views
on exposure, actual loss experience, and com-
petitiveness o prior years pricing had more
o an inuence on pricing changes. In some
lines, we consider the rate increases we have
seen to be insufcient to cover increasing loss
costs or the increased view o risk. Thereore,
we do not consider the market as having
become hard across the board yet.
We expect the Bermudian (re)insurance
market to report a moderate increase in its
aggregate probable maximum losses in 2012
compared with 2011, partly driven by a
recent update in the U.S. wind model rom a
leading catastrophe modeling rm. Some Ber-
mudian (re)insurers may limit their exposure
to regions that experienced heavy catastrophe
losses in 2011, especially where the catas-
trophe models do not adequately reect the
Contribution Analysis: EBIT Return on Average Underwriting Capital (ROAC)
Calendar Year vs. Accident Year Loss & LAE Ratio
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exposures (e.g. Asia-Pacic). We have noticedan increased interest by the Bermudian (re)
insurance market to expand into noncatas-
trophe exposed short-tail classes o business,
such as accident and health, crop, and surety.
As a result, we could see some margin com-
pression in those classes o business due to
increasing competition.
Second, investment yields have continued
to decline during the past ew years and are
currently at levels not seen in recent history.
The survey participants achieved a 3.1%
yield on cash and invested assets in 2011.
However, their investment yield has contin-
ued to decline during the past ve years rom
a recent high o 4.8% in 2007. Typically, the
duration o xed-income investments or the
Bermuda (re)insurance market is between
three and our years, with an average credit
rating o between AA and A. At year-end
2011, the yield on the intermediate (ve-year
to seven-year) AA and A corporate debt was
2.16% and 3.19%, respectively. The yield on
the AA intermediate corporate debt dropped
by 287 basis points (bps) in 2011 rom 2007
levels, while the A intermediate corporatedebt yield dropped 225 bps or the same
period. As a result o this signicant drop in
investment yields rom historical levels, the
P&C (re)insurance market is going to need to
adjust pricing upward to achieve the level o
returns required by its shareholders.
As o year-end 2011, the Bermudian (re)
insurers collectively had a limited exposure to
the European periphery countries (i.e. Por-
tugal, Ireland, Italy, Greece, Spain) sovereign
debt relative to their total invested assets. Thesurvey participants non-U.S. government
debt holdings represented approximately 15%
o total invested assets at year-end 2011 and
this allocation has been relatively constant
over the past our years.
During the past ve years, realized and
unrealized capital gains and losses have
contributed signicant volatility to P&C (re)
insurers nancials. As a result o the nan-
cial crisis in 2008, the survey participants
reported realized capital losses o $7.2 billion
and a change in unrealized capital losses o
$7.2 billion. During the ollowing year, they
reported a change in unrealized capital gains
o $7.3 billion and $1.1 billion in realized
capital gains. Although the survey partici-
pants shareholder equity declined by $10.9
billion (16%) as o year-end 2008, it more
than recovered in 2009 due to retained earn-
ings, a reversal in unrealized capital gains and
losses, and issuance o equity primarily rom
business combinations.
Finally, the Bermudian (re)insurance mar-
kets calendar-year results have beneted rom
avorable prior-year loss reserve developmentduring the past ew years. The avorable
prior-year development has come largely rom
the recent hard market years (i.e., 2002 to
2005). During the past ve years, the survey
participants calendar-year combined ratio has
beneted rom ve to nine percentage points
o avorable prior-year development. Because
their premium leverage (dened as the ratio
o net premiums written to underwriting
capital) has been around 0.5x to 0.6x, the
benet to the EBIT return on underwriting
capital has been about hal the impact on
the calendar year combined ratio. We believe
that the remaining redundancies associated
with these hard market years are limited. As a
result, we expect the ongoing benet derived
rom avorable prior-year development to
be greatly diminished relative to that o the
past ew years. Although we believe that loss
reserves are generally adequately reserved
among the Bermudian (re)insurers that Stan-
dard & Poors rates, some could experience
adverse development on the more recent ac-
cident years. We also believe that the reserve
redundancy and increased likelihood o
adverse development could make disciplined,
protable underwriting a ratings dierentiator
in the coming years.
Given the current pricing environment,
relatively low investment yields, and ex-
pectation or diminishing prior-year reserve
redundancies, we expect the participants to
generate an EBIT return on underwriting
capital in the low teens, assuming normalized
catastrophe losses. Although this expecta-
tion is in line with the ve-year (2007-2011)average EBIT return on underwriting capital,
we expect the contribution to be more evenly
split between underwriting activities and
investment activities.
The Top 10
The three companies (i.e., ACE Limited.,
XL Group plc, and PartnerRe Ltd.) leading the
top-10 list remain unchanged rom last year
with regard to market share measured by net
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premiums earned (NPE). Also, their position
within the list is the same as last year, with
ACE Limited in the pole position ollowed
by XL Group plc (No. 2) and PartnerRe Ltd.
(No. 3). The top ve is rounded out by Catlin
Group Limited (No. 4) and AXIS Capital
Holdings Ltd. (No. 5), which both retained
the same ranking as last year.
Unlike the top hal o the list, there was
movement among the bottom hal. The
ranking o Arch Capital Group Ltd. (No. 6)
remained unchanged. Both Everest Reinsur-
ance (Bermuda) Ltd. (No. 7) and Endurance
Specialty Holdings Ltd. (No. 8) advanced
within the ranks, while Aspen Insurance
Holdings Ltd. (No. 9) and Hiscox Ltd. (No.
10) declined.
The top 10 as a group increased their NPE
on a year-over-year basis by nearly 9%. The
premium growth was lead by ACE Lim-
ited, with 13.9%. The top-line growth that
ACE Limited experienced came rom recent
acquisitions, its global accident and health
business, and its P&C business in Asia and
Latin America.
Three other companies experienced
double-digit growth in premium: AXIS Capi-
tal Holdings Ltd. (12.5%), Catlin Group Ltd.
(12.2%), and Endurance Specialty Holdings
Ltd. (10.9%). The top-line growth at AXIS
Capital Holdings Ltd. was led by its insur-
ance operations. Although its reinsurance
operations also expanded, they did so more
slowly than the insurance operations. At
Catlin Group Ltd., the growth came primar-
ily rom its international and U.S. hubs. For
Endurance Specialty Holdings Ltd., the top-
line growth was heavily weighted toward its
insurance operation and came primarily rom
its agriculture operations and recently ormed
contract binding authority business.
XL Group plc increased NPE by nearly
6% during 2011 as management executed its
growth plan to recapture market share ollow-
ing actions during 2009 and 2010 to stabilize
the ranchise. Two companies (PartnerRe Ltd.
and Aspen Insurance Holdings Ltd.) saw a
decline in NPE in 2011.
It is worth noting that the nancials or
Everest Reinsurance, Tokio Millennium Re,
Amlin AG, and Lancashire Insurance reect
only their Bermuda operations and not the
entire group.
The survey participants that had a sizable
global catastrophe reinsurance operation
recorded lower returns on average equity
(ROAE) than those that were heavily weighted
toward insurance and noncatastrophe expo-
sure reinsurance operations. This was because
the P&C (re)insurance industry experienced
$105 billion in insured catastrophe losses.
Lancashire Insurance Co. Ltd. is No. 1 in
ROAE at 18.9% and signicantly ahead o the
other companies in the top ve.
The ve-year average ROAE or the survey
participants was 11.2%, which is based on
a simple average calculation. However, the
average does not provide a true sense or the
level o variability in the ROAE. During the
past ve years, the ROAE or the survey par-
ticipants has ranged rom a high o 20.4% in
2009 to a low o negative 0.4% in 2008.
Most o the survey participants are global
(re)insurers and have sizable operating enti-
ties domiciled in other jurisdictions. Bermuda
is the domicile or the ultimate parent com-
pany or 16 o the 22 survey participants. The
others are domiciled in Switzerland (3), the
U.K. (1), Ireland (1), and Luxembourg (1).
Is Bermudas tatus as the omiile of
choie uder Threat?
During the past two decades, Bermuda
(AA-/Stable/A-1+) has gradually become the
domicile o choice or reinsurers setting up
new businesses. Bermudas share o the global
reinsurance market doubled to about 8%
in 2010 rom 4% a decade ago. This dem-
onstrates the attractiveness and competitive
advantage o Bermuda as a nancial center.
Start-up activity on the island was particu-
larly strong in 2001 and 2002 ollowing the
Sept. 11, 2001, terrorist attacks, as well as in
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2005 and 2006 ater Hurricanes Katrina, Rita,
and Wilma (KRW). Ater Sept. 11 and KRW,
the global (re)insurance industry raised $22
billion and $43 billion, respectively. Demand
or reinsurance increased substantially during
those times, and Bermuda proved an attrac-
tive location or reinsurance companies as themajority o raised capital ew to the island.
This resh capital was deployed to strengthen
existing players balance sheets, nance a new
generation o startups (dubbed the Classes o
2001 and 2005), and sponsor a host o side-
cars (nancial structures that are created to
allow investors to take on the risk and return
o a book o business written by a (re)insurer
and earn the risk and return that arise rom
that business). Similarly in 2011, because
o the magnitude o the global catastrophe
losses, Bermudians sponsored ve newsidecars. In April 2012, Validus Holdings Ltd.
announced the ormation and capitalization
o a new Bermuda Class 4 reinsurer, PaCRe
Ltd. Validus Underwriting Services Ltd. will
underwrite the business, while Paulson & Co
Inc. will manage the investments.
Bermudas growth in recent decades has
been driven by the expansion o oshore
reinsurance, captive insurance, asset man-
agement, and other international nancial
services companies. The island has taken a
particularly important role in underwriting
large property/catastrophe programs and
other global complex risks, with a notable
pool o on-island actuarial expertise. As a
result, most Bermudian underwriters today
(excluding captives), consist o global play-
ers oering a combination o insurance and
reinsurance covers. As o Dec. 31, 2009, the
Bermuda Monetary Authority (BMA) regu-
lated 1,061 insurers with total assets o about
$500 billion, gross premiums o $120 billion,
and capital o $182 billion. Bermudian com-
panies are multijurisdictional with operations
worldwide. North America is by ar the larg-est market, ollowed by Europe.
Bermuda has a key competitive advantage
as it oers relatively quick regulatory ap-
proval to launch operations in a ew weeks
compared with several months in other juris-
dictions. This is valuable especially ollowing
major catastrophic events because reinsur-
ance capital providers need to take advantage
o increased demand or reinsurance coverage
and better pricing, as we saw ater Sept. 11
and KRW. In addition, Bermudas regulatory
system generally provides companies with
both quick approval to start up their busi-
nesses and the ability to change their policies
terms and conditions rapidly while quickly
responding to changing market conditions.
(Re)insurers based in Bermuda benet rom
avorable tax laws (zero corporate income
tax) and proximity to the U.S., the largest
insurance market in the world with $660 bil-
lion in nonlie insurance premiums in 2010.
Furthermore, according to the World Banks
worldwide governance indicators, Bermuda
ranks in the 75th-90th percentile or each o
six indicators: political stability, government
eectiveness, regulatory quality, rule o law,
voice and accountability, and control o cor-
ruption.
During the past ew years, we have
witnessed the emergence o new competing
(re)insurance hubs such as Dubai, Dublin,
Luxembourg, and Zurich. In addition, a
rejuvenated Lloyds market (A+/Stable/--) has
been adding new syndicates and progressively
regaining its ormer strong market position.
Interestingly, many o these new entrants are
Bermudians seeking a global distribution and
highly rated paper. However, Irelands recentnancial crisis might have tarnished its image
as a thriving nancial center.
The possibility o taxation or U.S.-sourced
business written either directly by a Bermuda-
based subsidiary or indirectly by a U.S.-based
operating subsidiary with signicant quota-
share arrangements back to Bermuda could
jeopardize Bermudas position as the domicile
o choice. The Neal Bill, i enacted, would
change the U.S. Internal Revenue Code to cap
the deductibility o reinsurance premiums
paid by insurers to oreign afliates. Previ-
ous proposals similar to the Neal Bill were
not enacted. Opponents to the bill argue that
it would cut reinsurance capacity and raise
costs or insurers. Even though the Neal bill
has not yet passed, the risk remains as the
U.S. government looks or additional tax rev-
enues to close the budget decit. We believe
a change in U.S. taxation, i enacted, would
have a modest impact on the tax positions o
Bermuda (re)insurers that we rate.
The number o (re)insurers that are moving
to establish their businesses in Europe has
risen slightly during the past ew years. For
example, ACE Limited and XL Group plc
moved their respective holding companies
to Switzerland and Ireland rom the Cayman
Islands. In addition, Allied World Assurance
Company Holdings AG moved to Switzerland
rom Bermuda. Also, Flagstone Reinsurance
Holdings S.A. re-domiciled to Luxembourg.
Nevertheless, even i Bermudian (re)insurers
re-domicile to other countries, we expect
companies to maintain a signicant operat-
ing presence in Bermuda given the countrys
established position as a property-catastrophe
underwriting hub and its proximity to theNorth American market. Furthermore, recent
economic turmoil in some European sover-
eigns is likely to slow the pace o re-domes-
tication to Europe rom Bermuda, at least in
the near term.
Because most Bermuda (re)insurers are
global and already have numerous operating
subsidiaries in several parts o the world, a
change in the country o domicile is unlikely
to aect their business signicantly. There-
SOSORSOSOR
IESTmET (M. $)SIECAR
SIECAR CAITAL
COmmITmET (mil. $)
alidus Holdings Ltd. 50 phaCat Re 180
Alterra Capital Holdings Ltd. 75 new Pt iV 200
Lancashire Holdings Ltd. 50 ccrd Re 250
RenaissanceRe Holdings Ltd. n.. up Re n..
montpelier Re Holdings Ltd. n.. n.. n..
ta 175 630
n.. nt vaabe
srce: Cmpae pbc acemet
EW BERmUA SIECARS
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ore, we do not expect to take any rating ac-
tions on holding companies or core operating
companies as a result o taxation or domicile
changes.
With Solvency II around the corner (ex-
pected to be eective in 2014), the BMA has
made signicant enhancementssuch as the
introduction o a risk-based capital adequacymodel and several other measures. As a result
o these advances, the Committee o Euro-
pean Insurance and Occupational Pensions
Supervisors (CEIOPS) has recommended to
the European Commission that Bermuda,
along with Switzerland, be in the rst wave
o third country equivalence assessments
under Solvency II. In our opinion, the BMA is
somewhat better prepared than several con-
tinental European supervisors or Solvency
II, which speaks highly o the BMAs eorts
in recent years. Not surprisingly, companies
participating in our survey ranked regula-
tion, renewal rates, investment returns,
cost control, and growing market share vs.
protability as their top-ve key business
issues or 2012.
eap of ajor catastrophes for 2011
During the past 40 years, six o the most
costly events rom an insured loss prospective
occurred during 2011, which aected the Pa-
cic Basin and North America. The largest o
these events was the Japanese earthquake and
tsunami (March 11, 2011) that is estimated
at $35 billion in insured losses. The Japanese
earthquake measured 9.0 magnitude on the
Richter scale and the epicenter was located
o the coast o the main Japanese island o
Honshu, which is 231 miles northeast o
Tokyo. This was the strongest earthquake ever
recorded in the region. The initial earthquake
triggered a tsunami that hit the eastern coast
o Japan with 30-oot waves. Most losses to
the domestic Japanese insurers will likelystem rom three types o coverage: earthquake
insurance or residential properties, earth-
quake re-expense coverage, and earthquake
extended coverage or commercial risks.
Earthquake re-expense coverage protects
the insured or re-related earthquake losses
and increases the value o the re insurance
claim payment by up to 5%. Earthquake re-
expense coverage can be added to both resi-
dential and commercial property policies. The
earthquake extended coverage or commercial
risk covers losses arising rom earthquakesand is typically a rider to the commercial
policies. Domestic Japanese insurers tend to
retain a limited amount o their earthquake
re-expense and earthquake extended cover-
age by ceding a majority o these risks to
global reinsurers.
We segment the (re)insurers that were
aected by this event into three categories:
domestic Japanese P&C insurers, global
multinational insurers, and global reinsurers.
We believe that the domestic Japanese P&C
market retained the largest share o these
losses. Although we revised our outlook on
the Japanese nonlie sector to negative rom
stable at the time (March 15, 2011), the
outlooks on the individual Japanese nonlie
insurers remained stable. We had a similar
view o global multinational insurers with
material operations in Japan.
As or the global reinsurers, we stated at
the time (March 15, 2011) that the losses
could have a material impact on earnings, but
due to insurers strong capital and liquidity,
those losses would likely represent a minimal
percentage o capital. Domestic Japaneseinsurers typically retain a high share o their
residential risk, which we believe would
likely mitigate global reinsurers losses. Our
outlook on the global reinsurance remained
stable, (March 15, 2011), as it stands today, in
large part because o these companies strong
balance sheets and strong enterprise risk
management relative to the rest o the insur-
ance market.
On Feb. 22, 2011, a 6.3 magnitude earth-
Top Business Issues in Beruda
Top Business Issues in Beruda Rated Either 1 or 2
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quake struck the Canterbury region o New
Zealand and is estimated to have caused $12
billion in insured losses. This earthquake was
located 10 kilometers southeast o Christ-
church, New Zealand. Christchurch is an
urbanized center and the second-largest city
in the country. The February Christchurchearthquake ollowed the Sept. 4, 2010, Can-
terbury earthquake that measured 7.1 and
caused signicant damage in Christchurch,
New Zealand. The New Zealand Earthquake
Commission classied the February Christ-
church earthquake as a separate event and
not an atershock o the Sept. 4 Canterbury
earthquake. It was our view at the time (Feb.
23, 2011) that the Christchurch earthquake
would place downward pressure on earnings
o the domestic New Zealand insurers but
that their capital strength and extensive rein-surance protection would limit any negative
rating pressure.
The Thailand ood losses that hit the P&C
(re)insurance market in October 2011 were
triggered by heavy rainall that occurred rom
May to October. In addition, decisions relat-
ing to water management (release o storm
waters rom dams) are believed to have con-
tributed to the catastrophe to some degree.
Standard & Poors estimates the insured losses
resulting rom the Thailand oods at $16
billion to $18 billion. On Nov. 3, 2011, we
revised our outlook on the Thai P&C insur-
ance sector to negative rom stable, which was
based on our view that the nancial prole o
some Thai P&C insurers will likely deterio-
rate signicantly in 2011. Also, the relatively
small size o the Thai P&C insurers makes
them more vulnerable to accumulated
losses than the larger international insurers.
Insured losses have been so high in the Thai-
land oods that it has changed our opinion
on this market being catastrophe-remote.
Standard & Poors took negative rating
actions on two Bermuda-based (re)insur-ances (i.e. PartnerRe Ltd. and Platinum
Underwriters Holdings Ltd.) as a result o
their 2011 catastrophe losses that we believe
caused them to be negative outliers. During
2011, Platinum Underwriters Holdings Ltd.
reported $439 million, or 23% o reported
2010 GAAP equity, in catastrophe losses or
the year. Standard & Poors believes that the
sizable catastrophe losses indicate weakness
in the companys ability to manage catastro-
phe risk. As a result, Standard & Poors low-
ered its nancial strength ratings on Platinum
Underwriters core operating companies toA- rom A.
During 2011, PartnerRe Ltd. reported
$1,790 million, or 25% o reported 2010
GAAP equity, in catastrophe losses or the
year. Although companys incurred catastro-
phe losses were within managements stated
tolerances or its lines o business and dier-
ent regions, they highlighted the companys
exposure to moderate to high earnings and
capital volatility, which Standard & Poors
believes is more in line with peers rated A+.
As a result, we lowered our nancial strength
ratings on PartnerRes operating companies to
A+ rom AA-.
Unlike 2010 and 2011, the rst-quarter in
2012 was relatively benign rom a catastrophe
loss perspective.
quit arket Treds
More than three quarters o the survey par-
ticipants have common shares that are listed
on public exchanges, and the majority o
those are listed on a U.S. exchange. We have
generated a price-weighed index to consider
the equity value and valuation multiples o
the U.S. publicly listed survey participants
based on metrics as o Dec. 31 or each o the
ve years.
As a result o the global nancial-marketscrisis, the value o the index declined by
nearly 24% rom 2007 to 2008. Although
Index: U.S. ublicly Listed Survey articipants
Coposition of et reius Earned (a amt b f u.s. Dar)
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the index continued to regain value during
the subsequent three-year period, it was still
o by 5% at year-end 2011 rom the 2007
level. In addition, the global nancial crisishurt the indexs book value, as evidenced by
a 12% decline at year-end 2008. However,
the book value o the index regained all o the
value lost during 2008 by 2009 through the
retention o earnings, reversal in unrealized
capital losses, and issuance o equity primar-
ily rom business combinations. During 2009,
Validus Holdings Ltd. acquired IPC Holdings
Ltd. in a transaction valued at $1.77 billion,
and PartnerRe Ltd. acquired PARIS RE S.A.
in a stock exchanged valued at $2 billion.
Although IPC Holdings Ltd. was a Bermuda
reinsurer, its results are captured in our 2012
Bermuda survey through its acquisition byValidus Holdings Ltd. These two transactions
represent the majority o the equity issuance
or the year.
The price-to-book value multiple or the
index declined signicantly rom 2007 to
2009. Since then, the index has been trading
at nearly a 20% discount to book value. As
o year-end 2011, Arch Capital Group Ltd.
traded at the highest multiple (1.18x) and
Argo Group International Holdings Ltd.
was trading at the lowest multiple (0.52x).
Because the universe o publicly listed P&C
(re)insurers has been trading below book
value or an extended time, we would have
expected a greater number o scale-motivated
acquisitions.
In addition to the IPC Holdings Ltd. andPARIS RE S.A. transactions, the only other
scale-motivated acquisition was Max Capital
Group Ltd.s 2010 acquisition o Harbor
Point Ltd.a privately held Bermuda rein-
surer. The combined entity was renamed
Alterra Capital Holdings. During 2011, Both
Allied World Assurance Company Hold-
ings AG. and Validus Holdings Ltd. also
attempted to acquire Transatlantic Holdings
Inc., a U.S.-domiciled global reinsurer. How-
ever, Alleghany Corp. ultimately acquired
the reinsurer. We believe that some o thesmaller Bermudian (re)insurers will look to
combine with one another or a larger (re)
insurer in the near term.
In addition to some scale-motivated
transactions, there has been some strategic
acquisition (e.g. Everest Re Groups acquisi-
tion o Heartland Crop Insurance, a managing
general agency) and some divestures (e.g.
RenaissanceRe Holdings Ltd. selling its U.S.
primary operations to QBE Insurance Group
Ltd.). We do not expect to see many acquisi-
tions o production sources (e.g. wholesale
brokers, managing general agents) due to the
potential or channel conict. The excep-
tion to this would be a highly ocused niche
market producer.
The oad head
While the 2011 catastrophe losses weighed
heavily on the P&C (re)insurance industry,
the Bermudians aired well collectively as
investment income oset underwriting losses
or the year. Furthermore, we consider the
Bermudians enterprise risk management
capabilities to be strong, and in our opinion
they are among the leading practitioners
in the industry. Despite the record level o
insured catastrophe losses or the industry,
pricing changes in the reinsurance market
have been ragmented. While property-ca-
tastrophe treaties that were loss ree in 2011
have experienced rate increases o 5%-10%,
loss-aected property-catastrophe treaties
experienced greater rate increasesalthough
they varied by region. However, rate activity
Gross reius by Line of Business
Gross reiu by Geographic Region
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Bermudian Business Insurance Special 2012
on casualty treaties is mixed and ranged rom
down 5% to up 5%.
Unlike ater the Sept. 11 terrorist attack
and hurricane Katrina in 2001 and 2005,
respectively, we did not see an interest by
investors to support a 2011 class o new
Bermuda (re)insurers, which we believe isbecause the industry did not experience a
signicant erosion in underwriting capital
and the lack o widespread rate increases
combined with prolonged low valuation or
the publicly listed reinsurers. However, we
did see a modest interest in unding new
Continued on page 40
STOCk E-CHAGESYmBOL
COmmOSTOCk RICE
(5)52 WEEk
HIGH/LOW (6) /E RATIO
BOOk ALUEER COmmO
SHAREmARkET/BOOkALUE RATIO
BASICEARIG
ER SHAREFULLY ILUTE
EARIGS
Curr Prior Curr Prior Curr Prior Curr Prior Curr Prior Curr Prior Curr Prior
ACE Liited C 70.12 62.25 74.50/56.90 62.37/47.50 14.98 6.80 72.76 68.59 0.91 0.86 4.68 9.15 4.65 9.11
Allied World AssuranceCopany Holdings, Ltd
W 62.93 59.44 70.97/49.00 60.41/40.60 8.73 4.16 83.44 80.75 0.75 0.74 7.21 14.30 6.92 13.32
Alterra CapitalHoldings Ltd.
l 23.63 21.64 25.68/17.33 24.99/17.02 38.11 6.78 27.51 26.30 0.86 0.82 0.62 3.19 0.61 3.17
Arch Capital GroupLtd. (1)
Cgl 37.66 29.35 38.60/29.63 92.05/65.70 12.68 5.67 32.03 29.99 1.18 0.98 2.97 5.18 2.97 5.18
Argo Group InternationalHoldings, Ltd.
gii 28.96 37.45 33.29/24.88 40.14/25.59 -9.56 13.38 56.21 58.41 0.52 0.64 -3.03 2.80 -3.03 2.76
Aspen InsuranceHoldings Liited
l & lB
26.50 28.62 29.09/21.99 31.60/23.80 -14.56 7.53 39.89 40.96 0.66 0.70 -1.82 3.80 -1.82 3.62
AIS Capital HoldingsLiited
Xs 31.96 35.88 36.63/24.80 37.15/27.22 399.50 5.32 39.37 45.60 0.81 0.79 0.08 6.74 0.07 6.02
Catlin Group Liited (2) Cgl 3.99 3.70 4.14/3.20 3.93/3.20 55.41 5.81 7.85 8.34 1.00 1.00 0.11 0.98 0.11 0.93
Endurance SpecialtyHoldings Ltd.
n 38.25 46.07 49.38/31.67 34.86/46.64 -12.97 6.85 51.48 57.25 0.74 0.80 -2.95 6.73 -2.95 6.38
Flagstone ReinsuranceHoldings Liited
sR 8.29 12.60 9.53/6.41 13.14/9.49 -1.78 10.24 11.62 16.07 0.71 0.78 -4.65 1.23 -4.65 1.23
Hiscox Ltd. (3) sX.l 3.74 3.81 4.25/3.41 3.81/3.17 67.91 8.08 4.98 5.23 1.15 1.15 0.09 0.73 0.09 0.70
montpelier ReHoldings Ltd.
MR 17.75 19.94 18.98/15.06 20.59/14.30 8.83 6.71 22.71 24.53 0.78 0.81 -2.01 2.97 -2.01 2.97
artnerRe Ltd. (4) PR 64.21 80.35 83.26/50.16 82.00/70.06 -7.64 7.54 84.82 93.77 0.76 0.86 -8.40 10.65 -8.40 10.46
RenaissanceReHoldings Ltd.
RnR 74.37 63.69 75.16/59.50 64.50/50.81 -40.42 5.13 59.27 62.58 1.25 1.02 -1.84 12.42 -1.84 12.31
alidus Holdings, Ltd. VR 31.50 30.61 34.95/23.24 30.66/23.14 225.00 8.98 34.67 35.76 0.91 0.86 0.14 3.41 0.14 3.34
L Group plc Xl 19.77 21.82 25.43/17.69 22.22/15.59 -13.01 12.54 29.64 29.78 0.67 0.73 -1.52 1.74 -1.52 1.73
(1) perd reect a 3:1 hare pt that ccrred May 2011.
(2) Cat grp lmted tc prce demated gBP bt reprt usD.
(3) cx ltd. cmm tc prce ad 52 wee hh/w are demated gBP; a ther amt hw usD.
(4) ParterRe ltd. P/ rat baed fy dted ear per hare.
(5) Crret reect c prce at December 30, 2011: Prr reect c prce at December 31, 2010.
(6) Crret reect the 12 mth perd ed December 30, 2011; Prr reect the 12 mth perd ed December 31, 2010.
puBliCly-Traded companies
et reius Written to Capital & Surplus (a amt b f u.s. Dar)
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CAITAL & SURLUS
S&pS
RATInG
(1)
OUTLO
OkS(2)
ERmSCORE
BASIS
OF
ACCOU
nTInG
FORSURvEY
RESpO
nSE
CURRE
nT
pRIOR
pREmIUmS
EARnE
d
CURRE
nT
nETIn
COmE
CURRE
nT
InSURAnCE
REGULATIOn
CLASS
dATEO
F
InCORpORATIOn
ACE Liited - stabe str us gP 24,516,000 22,973,842 15,387,000 1,585,000 Ca 4 8/30/85
Allied World AssuranceCopany Holdings, AG
stabe str us gP 3,149,022 3,075,820 1,456,992 274,548 Ca 4 11/13/01
Alterra Capital Holdings Ltd. stabe str us gP 2,809,235 2,918,270 1,421,983 65,282 Ca 4 8/20/99
Alin AG stabedeqate wth a
ptve tredother 1,350,352 1,571,323 842,059 (98,785) Ca 4 10/28/05
Arch Capital Group Ltd. + stabe str us gP 4,628,486 4,513,003 2,631,815 436,358 Ca 4 3/1/95
Argo Group InternationalHoldings, Ltd.
- stabe deqate us gP 1,479,000 1,626,100 1,082,000 (82,400) Ca 4 10/5/99
Aspen Insurance Holdings Liited stabe str us gP 3,172,000 3,242,000 1,889,000 (106,000) Ca 4 5/23/02
AIS Capital Holdings Liited + stabe str us gP 5,444,079 5,624,970 3,314,961 46,305 Ca 4 11/8/01
Catlin Group Liited stabe str us gP 3,297,741 3,446,870 3,611,623 38,397 Ca 4 6/25/99
Endurance Specialty Holdings Ltd. stabe xceet us gP 2,611,165 2,848,153 1,931,393 (93,734) Ca 4 11/30/01
Everest Reinsurance(Beruda), Ltd. (3)
+ stabedeqate wth
tr r ctrBermdastattry
2,736,599 2,818,655 2,024,346 97,359 Ca 4 3/1/00
Flagstone ReinsuranceHoldings Liited
nR nR nR us gP 789,048 1,134,733 571,478 (304,471) Ca 4 11/10/05
Hiscox Ltd. stabe str other 1,934,084 1,987,798 1,837,736 34,141 Ca 4 12/12/06
Lancashire InsuranceCopany Liited
- stabedeqate wth a
ptve tredother 1,201,300 1,394,500 512,500 239,700 Ca 4 10/28/05
montpelier Re Holdings Ltd. - stabe str us gP 1,549,300 1,628,800 622,700 (115,200) Ca 4 11/14/01
Oil Casualty Insurance, Ltd. BBB+ stabe deqate us gP 461,117 431,503 37,331 29,614 Ca 3 5/14/86
Oil Insurance Liited - stabe deqate us gP 3,033,147 3,200,635 543,425 (104,636) Ca 2 12/14/71
artnerRe Ltd. + stabedeqate wth
tr r ctrus gP 6,467,542 7,206,919 4,647,754 (520,291) Ca 4 8/24/93
RenaissanceRe Holdings Ltd. (4) - stabe xceet us gP 3,608,533 3,939,214 957,049 (92,235) /a 6/7/93
Toio millenniu Re Ltd. - neatve str us gP 1,050,865 1,187,644 456,862 (56,320) Ca 3B 3/15/00
alidus Holdings, Ltd. - stabedeqate wth
tr r ctrus gP 3 ,448,425 3 ,504,831 1 ,802,143 21 ,329 Ca 4 10/ 19/05
L Group plc stabe str us gP 10,769,410 10,684,949 5,327,112 (403,883) Ca 4 3/16/98
ta 89,506,450 90,960,532 52,909,262 890,078
(In US $000s)As of Decenber 31, 2011
18Th annual Bermudian BuSineSSand deloiTTe
(1) the rat th tabe are aca treth rat f the ead rated perat cmpae wth each rp a f pr 23, 2012.
(2) ot ca be ptve, eatve, r tabe, ad a a pteta chae a teractve rat ver the ext 1-2 year.
(3) veret Rerace (Bermda) ltd. aca frmat prvded th rvey adted.
(4) ReaaceRe d ltd. mt cat perat bdare cde Reaace Rerace ad DaVc
whch are retered a Ca 4 ad gece ad p layer Re whch are retered a Ca 3.
nR nt Rated by stadard & Pr.
^ ifrmat t prvded by repdet.
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TYE OFISURACE AS %
OF REmIUmS BREAkOW OF REmIUm AS CLASS OF BUSIESS RISk BREAkOW OF GROSS REmIUm BY
GEOGRAHIC REGIO
dIRECT
REInSU
RAnCE
mARInE&
AvIATIO
n
FInAnC
IAL
GUARAnTEE
ACCIdE
nT&
HEALTH
pROpER
TY
pROpER
TY
CATAST
ROpHE
pROFES
SIOnAL
LIABILIT
Y
ExCESS
LIABILITY
GEnERAL
LIABILIT
Y
CASUALTY
FInITE
WORkE
RS
COmpE
nSATIOn
LIFE
TERROR
ISm
OTHER
Uk
nORTH
AmERICA
EUROpE
ASIA,AUSTRALIA
&nEWZ
EALAnd
BERmUdA
RESTOFWORLd
85% 15% 0% 0% 23% 35% 2% 0% 0% 0% 35% 0% 0% 5% 0% 0% 0% 61% 18% 14% 0% 7%
70% 30% 0% 0% 0% 13% 0% 21% 27% 9% 2% 0% 0% 0% 0% 28% 0% 56% 11% 4% 29% 0%
43% 57% 9% 0% 2% 35% 0% 20% 10% 5% 11% 0% 2% 0% 0% 6% 0% 74% 16% 0% 0% 10%
0% 100% 1% 0% 0% 18% 33% 0% 0% 10% 1% 0% 0% 0% 0% 37% 36% 32% 18% 9% 0% 5%
70% 30% 2% 0% 2% 29% 8% 11% 13% 0% 0% 0% 7% 0% 1% 27% 0% 68% 20% 7% 3% 2%
^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
46% 54% 0% 0% 0% 23% 14% 0% 0% 0% 20% 0% 0% 0% 0% 43% 7% 40% 5% 6% 0% 42%
52% 48% 8% 0% 3% 24% 12% 26% 0% 11% 0% 0% 0% 0% 1% 15% 0% 43% 36% 0% 20% 1%
63% 37% 24% 0% 0% 11% 0% 0% 0% 1% 20% 0% 0% 0% 0% 44% 52% 21% 8% 7% 12% 0%
60% 40% 2% 1% 0% 15% 14% 7% 12% 0% 11% 0% 0% 0% 0% 38% 1% 70% 2% 2% 25% 0%
0% 100% 2% 0% 4% 45% 0% 5% 12% 21% 5% 0% 6% 0% 0% 0% 13% 79% 5% 0% 3% 0%
8% 92% 0% 0% 0% 22% 55% 0% 0% 0% 0% 0% 0% 0% 0% 23% 0% 44% 16% 12% 0% 28%
74% 26% 7% 0% 1% 26% 3% 24% 0% 0% 0% 0% 0% 0% 3% 36% 23% 36% 14% 5% 0% 22%
73% 27% 19% 0% 0% 46% 25% 0% 0% 0% 0% 0% 0% 0% 10% 0% 0% 33% 5% 6% 0% 56%
19% 81% 0% 0% 0% 7% 43% 0% 0% 0% 0% 0% 0% 0% 0% 50% 32% 8% 0% 0% 60% 0%
80% 20% 0% 0% 0% 0% 0% 0% 100% 0% 0% 0% 0% 0% 0% 0% ^ ^ ^ ^ ^ ^
100% 0% 0% 0% 0% 100% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% ^ ^ ^ ^ ^ ^
0% 100% 12% 0% 0% 15% 13% 0% 0% 0% 11% 0% 0% 17% 0% 32% 0% 36% 42% 12% 0% 10%
2% 98% 0% 0% 0% 3% 84% 0% 0% 0% 0% 0% 0% 0% 0% 13% 0% 62% 3% 5% 0% 30%
0% 100% 1% 0% 0% 0% 74% 2% 0% 1% 0% 0% 3% 0% 1% 18% 0% 0% 0% 0% 100% 0%
24% 76% 33% 0% 1% 15% 31% 0% 0% 0% 0% 0% 1% 0% 2% 17% 0% 30% 7% 2% 0% 61%
64% 36% 11% 0% 0% 24% 6% 22% 0% 0% 0% 0% 0% 5% 0% 32% 0% 40% 49% 0% 11% 0%
inSuranCe Survey
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ASSETS
C
ASH&CASH
E
QUIvALEnTS
Q
UOTEd
InvESTmEnTS
O
THER
InvESTmEnTS
R
EInSURAnCE
B
ALAnCES
R
ECEIvABLE
O
THER
A
SSETS
G
OOdWILL
A
ndOTHER
InTAnGIBLE
A
SSETS
T
OTAL
A
SSETS
L
OSS
R
ESERvES
U
nEARnEd
p
REmIUm
R
ESERvE
ACE Liited 614,000 53,362,000 2,314,000 4,387,000 21,997,000 4,831,000 87,505,000 41,751,000 6,334,000
Allied World AssuranceCopany Holdings, AG
716,604 6,498,702 907,892 1,229,640 1,447,046 322,274 11,122,158 5,225,143 1,078,412
Alterra Capital Holdings Ltd. 922,844 6,605,390 286,515 715,154 1,599,833 56,111 10,185,847 5,407,235 1,020,639
Alin AG 137,474 1,610,761 525,509 484,100 243,642 - 3,001,486 963,454 439,069
Arch Capital Group Ltd. 351,699 11,965,334 35,715 1,851,584 2,915,142 22,295 17,141,769 8,456,210 1,411,872
Argo Group InternationalHoldings, Ltd.
100,900 3,915,500 232,000 1,143,500 763,200 246,800 6,401,900 3,291,100 658,200
Aspen Insurance HoldingsLiited
1,239,000 6,302,000 33,000 894,000 997,000 20,000 9,485,000 4,525,000 916,000
AIS Capital Holdings Liited 981,849 11,767,569 699,320 3,184,168 1,073,563 99,590 17,806,059 8,425,045 2,454,462
Catlin Group Liited 2,063,493 6,324,563 0 1,216,902 2,636,773 717,276 12,959,007 6,466,719 2,118,722
Endurance Specialty HoldingsLtd.
890,914 4,959,535 432,658 636,727 1,190,953 181,828 8,292,615 3,824,224 932,108
Everest Reinsurance(Beruda), Ltd. (1)
235,383 6,284,615 174,657 1,216,310 291,337 - 8,202,302 4,581,287 704,283
Flagstone ReinsuranceHoldings Liited
366,962 1,149,051 125,452 236,375 900,656 - 2,778,496 897,368 215,316
Hiscox Ltd. (2) 795,482 3,647,699 9,825 758,473 1,187,511 104,030 6,503,020 2,929,959 920,441
Lancashire InsuranceCopany Liited
264,900 1,439,000 8,700 3,600 325,700 600 2,042,500 457,100 275,500
montpelier Re Holdings Ltd. 340,300 2,486,300 102,400 305,900 264,600 - 3,499,500 1,077,100 265,900
Oil Casualty Insurance, Ltd. 52,934 740,982 - 187,179 101,168 - 1,082,263 307,448 44,327
Oil Insurance Liited 282,441 5,255,944 - - 207,620 - 5,746,005 2,280,278 -
artnerRe Ltd. 1,342,257 14,929,091 1,626,164 2,059,976 2,308,485 589,400 22,855,373 12,918,753 1,448,841
RenaissanceRe Holdings Ltd.(3)(4)
216,984 4,433,517 1,775,735 471,878 837,904 8,894 7,744,912 1,992,354 347,655
Toio millenniu Re Ltd. 288,336 932,275 219,709 145,226 289,717 4,833 1,880,096 511,089 263,135
alidus Holdings, Ltd. 832,844 5,174,336 16,787 462,980 996,400 135,124 7,618,471 2,631,143 772,382
L Group plc 3,825,125 29,686,263 2,037,991 220,017 8,449,360 407,321 44,626,077 20,613,901 3,555,310
Total 16,862,725 189,470,427 11,564,029 21,810,689 51,024,610 7,747,376 2 98,479,856 139,532,910 26,176,574
BalanCe SheeT daTa
(In US $000s)
(1) veret Rerace (Bermda) ltd aca frmat prvded th rvey adted.
(2) cx ltd. baace heet amt were traated frm gBP t usD the year ed c rate f $1.57.
(3) icded ther abte $757.7 m reated t ReaaceRe d ltd. redeemabe ctr teret DaVcRe d ltd.
(4) ReaaceRe d ltd. etered t a detve tc prchae areemet wth QB d, ic. t e btatay a f t u.s.-baed race perat
nvember 2010. he traact ced March 2011. et ad abte f dcted perat hed fr ae f $n ad $13,507 have bee cded
ther aet ad ther abte, repectvey, at December 31, 2011 (2010 - $872,147 ad $598,511, repectvey; 2009 - $931,207 ad 665,641, repectvey).
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LIABILITIES A CAITAL & SURLUS
d
EBT
O
THER
LIABILITIES
T
OTAL
L
IABILITIES
C
OmmOn
S
TOCk
p
REFERREd
S
TOCk
A
ddITIOnAL
p
AIdIn
C
ApITAL
R
ETAInEd
E
ARnInGS
U
nREALISEd
InvESTmEnT
G
AInS
(
LOSSES)
O
THER
T
OTALCApITAL
&
SURpLUS
T
OTAL
LIABILITIES
A
ndCApITAL
&
SURpLUS
4,920,000 9,984,000 62,989,000 10,095,000 - 5,326,000 7,511,000 1,715,000 (131,000) 24,516,000 87,505,000
797,949 871,632 7,973,136 557,153 - 78,225 2,635,750 14,484 (136,590) 3,149,022 11,122,158
440,500 508,238 7,376,612 102,102 - 1,847,034 693,142 166,957 - 2,809,235 10,185,847
148,700 99,911 1,651,134 10,204 - 848,704 348,737 - 142,707 1,350,352 3,001,486
400,000 2,245,201 12,513,283 549 130 486,289 4,833,067 153,923 (845,472) 4,628,486 17,141,769
377,000 596,600 4,922,900 31,300 - 716,800 752,000 139,800 (160,900) 1,479,000 6,401,900
499,000 373,000 6,313,000 - - 1,385,000 1,358,000 334,000 95,000 3,172,000 9,485,000
994,664 487,809 12,361,980 2,125 500,000 2,105,386 4,155,392 116,096 (1,434,920) 5,444,079 17,806,059
- 1,075,825 9,661,266 3,610 589,785 1,959,346 1,075,963 - (330,963) 3,297,741 12,959,007
528,118 397,000 5,681,450 43,087 17,200 526,910 1,873,418 142,973 7,577 2,611,165 8,292,615
- 180,133 5,465,703 1,250 - 1,327,791 1,217,093 275,926 (85,461) 2,736,599 8,202,302
250,575 626 ,189 1,989,448 845 (160,448) 872,819 88,416 - (12,584) 789,048 2,778,496
- 718,536 4,568,936 31,667 - 426,720 1,382,501 - 93,196 1,934,084 6,503,020
- 108,600 841,200 1,000 - - 228,400 15,300 956,600 1,201,300 2,042,500
327,800 279,400 1 ,950,200 100 150,000 1 ,165,600 259,700 (4,100) (22,000) 1 ,549,300 3,499,500
150,334 119,037 621,146 305 - - 460,812 - - 461,117 1,082,263
- 432,580 2,712,858 520 402,458 - 2,630,169 - - 3,033,147 5,746,005
750,000 1,270,237 16,387,831 84,767 35,750 3,803,796 4,035,103 - (1,491,874) 6,467,542 22,855,373
353,620 1,442,750 4,136,379 51,543 550,000 - 2,991,890 11,760 3,340 3,608,533 7,744,912
- 55,007 829,231 250,000 - 400,000 368,856 30,598 1,411 1,050,865 1,880,096
536,782 229,739 4,170,046 17,407 - 1,893,890 1,543,729 - (6,601) 3,448,425 7,618,471
2,275,327 7,412,129 33,856,667 3,157 - 8,938,678 (99,961) 521,796 1,405,740 10,769,410 44,626,077
13,750,369 29,513,553 208,973,406 11,287,691 2,084,875 34,108,988 40,343,177 3,634,513 (1,952,794) 89,506,450 298,479,856
fiscal 2011
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Bermudian Business Insurance Special 2012
(IN US $000s) LOSS RATIO (1) EESE RATIO (1) COmBIE RATIO (1) RATIO ( TO 1)% CHAGE FROm
RIOR ERIO
CURREn
T
pRIOR
CURREn
T
pRIOR
CURREn
T
pRIOR
nETpREmIUmSTO
CApITAL&SURpLUS
LOSSRESERvETO
CApITAL&SURpLUS
CApITAL&SURpLUS
nETpREmIUm
WRITTEn
LOSSRATIO(5)
(WEIGH
TEdAv.5YR.)
GROSS
pREmIUm
WRITTEn
CEdEdpREmIUmS
C lmted 65.70% 59.20% 28.90% 31.00% 94.60% 90.20% 62.70% 170.30% 6.71% 12.14% 61.18% 20,831,000 (5,459,000)
ed Wrd raceCmpay d, g
65.83% 52.07% 30.13% 32.81% 95.96% 84.88% 48.71% 165.93% 2.38% 10.15% 56.00% 1,939,521 ( 405,755)
terra Capta d ltd. (9) 66.50% 56.07% 31.49% 29.93% 97.99% 86.00% 50.87% 192.48% -3.74% 38.06% 63.56% 1,900,710 (471,712)
m g 92.90% 64.36% 19.50% 18.20% 112.40% 82.56% 71.59% 71.35% -14.06% 48.53% 58.75% 1,019,443 (52,693)
rch Capta grp ltd. 65.64% 59.46% 32.66% 32.90% 98.30% 92.36% 57.76% 182.70% 2.56% 6.46% 60.82% 3,436,456 (763,130)
r grp iteratad, ltd.
79.77% 64.17% 39.44% 39.01% 119.21% 103.18% 72.47% 222.52% -9.05% -2.18% 65.97% 1,544,800 (473,000)
pe irace dlmted (3)
82.37% 65.81% 30.86% 30.93% 113.23% 96.74% 60.81% 142.65% -2.16% 2.06% 63.81% 2,208,000 (279,000)
Xis Capta d lmted (12)(13) (14)
80.70% 56.90% 29.17% 29.21% 109.87% 86.11% 62.81% 154.76% -3.22% 8.64% 60.49% 4,096,153 (676,719)
Cat grp lmted 70.02% 57.54% 32.60% 32.30% 102.62% 89.84% 116.29% 196.10% -4.33% 15.59% 58.91% 4,513,285 (678,272)
drace specaty dltd.
84.53% 59.62% 28.51% 29.16% 113.04% 88.78% 75.82% 146.46% -8.32% 12.25% 61.69% 2,467,114 (487,293)
veret Rerace(Bermda), ltd. (8)
81.76% 67.14% 28.63% 31.29% 110.39% 98.43% 76.15% 167.41% -2.91% 12.05% 67.22% 2,242,319 (158,325)
ate Reraced lmted
118.38% 62.22% 35.20% 39.49% 153.58% 101.71% 70.77% 113.73% -30.46% -36.82% 63.29% 789,697 (231,265)
cx ltd. (4) (10) (11) 60.20% 50.10% 39.30% 39.20% 99.50% 89.30% 97.43% 151.49% -2.70% 7.68% 49.90% 2,325,996 (441,709)
lacahre iraceCmpay lmted
32.62% 27.53% 29.15% 25.92% 61.77% 53.45% 41.70% 38.05% -13.85% -13.35% 31.87% 522,400 (21,400)
Mtpeer Re d ltd. 98.30% 48.34% 32.76% 15.78% 131.06% 64.12% 40.28% 69.52% -4.88% -6.70% -7.25% 725,500 (101,500)
o Caaty irace, ltd. 0.52% 305.61% 0.03% 2.87% 0.55% 308.48% 11.82% 66.67% 6.86% 65.37% 15.45% 82,105 (27,588)
o irace lmted 110.25% 53.94% 0.00% -0.10% 110.25% 53.84% 17.92% 75.18% -5.23% -30.66% 82.05% 543,425 -
ParterRe ltd. (6) 96.70% 65.94% 28.70% 29.11% 125.40% 95.05% 69.37% 199.75% -10.26% -4.65% 66.01% 4,633,054 (146,725)
ReaaceRe d ltd. (3) 90.55% 14.95% 28.08% 30.18% 118.63% 45.13% 28.07% 55.21% -8.39% 19.30% 19.50% 1,434,976 (422,203)
Mem Re ltd. 82.17% 53.65% 26.50% 26.73% 108.67% 80.38% 51.18% 48.64% -11.52% 28.56% 35.29% 664,135 (126,324)
Vad d, ltd. 69.05% 56.08% 30.30% 30.15% 99.35% 86.23% 50.25% 76.30% -1.61% 4.22% 51.16% 2,124,691 (289,241)
Xl grp pc (7) 76.56% 63.84% 30.90% 30.94% 107.46% 94.78% 50.45% 191.41% 0.79% 8.68% 65.57% 6,898,284 (1,464,896)
ta 66,943,064 (13,177,750)
(1) l, expee & cmbed rat y fr -fe be.
(2) Retr qty = net icme / verae f CY Capta & srp ad PY
Capta & srp.
(3) ReaaceRe d ltd. etered t a detve tc prchae
areemet wth QB d, ic. t e btatay a f t u.s.-baed
race perat nvember 2010. he traact ced March
2011. et ad abte f dcted perat hed fr ae f $n ad
$13,507 have bee cded ther aet ad ther abte, repectvey,
at December 31, 2011 (2010 - $872,147 ad $598,511, repectvey; 2009 -
$931,207 ad $665,641, repectvey).
(4) cx ltd. retr eqty f 1.7% a preeted t aa reprt
cacated baed adjted pe eqty whch tae t cderat
the wehted averae f capta frm hare pt exerce e wehted
averae paymet f capta t harehder by dvded ad treary tc.
(5) l rat (5 year averae) = m f ad l (ve year) / m f
premm eared (5 year). r the repdet that prvded e tha
ve year f data, the averae ha bee cacated ver the mber f perd
prvded.
(6) ParterRe ltd. rat excde fe be.
(7) Xl grp pc derwrt cme / () eera perat excde fe
operaTing daTa
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Bermudian Business Insurance Special 2012
CURRET ERIO
nETpREmIUmS
WRITTEn
CHAnGEInUpR
pREmIU
mSEARnEd
LOSSES
&LAE
COmmISSIOnS&
BROkER
AGE
OTHER
UndERWRITInG
ExpEnS
ES
UndERWRITInG
GAIn/(LOSS)
InvESTmEnTInCOmE
EARnEd
(ExCLUdInG
REALIZE
dGAInS/
LOSSES
)
REALIZE
dCApITAL
GAIn/(LOSS)
CHAnGEIn
UnREALIZEd
GAInS/(LOSSES)
InTERESTExpEnSE
OndEB
T
OTHERInCOmE
(ExpEnSES)
TAxBEn
EFIT
(ExpEnSE)
nETInC
OmE
RETURn
On
EQUITY
(2)
RETURn
On
REvEnU
E
15,372,000 15,000 15,387,000 9,921,000 2,447,000 2,052,000 967,000 2,242,000 (795,000) - (250,000) (73,000) (506,000) 1,585,000 6.68% 16.44%
1,533,766 (76,774) 1,456,992 959,156 167,295 271,656 58,885 195,948 32,731 (22,654) (54,989) 95,607 (30,980) 274,548 8.82% 16.90%
1,428,998 (7,015) 1,421,983 945,593 261,102 186,743 28,545 234,846 8,564 (49,848) (43,688) (66,247) 9,501 65,282 2.28% 6.10%
966,750 (124,691) 842,059 782,281 1 17 ,141 47 ,071 ( 104,434) 26 ,730 24,640 (40,267) - (6,814) 1 ,360 (98,785) - 6.76% - 9.81%
2,673,326 (41,511) 2,631,815 1,727,553 459,508 400,100 44,654 338,198 101,584 - (31,691) (25,733) 9,346 436,358 9.55% 11.05%
1,071,800 10,200 1,082,000 863,100 426,700 - (207,800) 125,800 49,200 (3,500) (22,100) (4,500) (19,500) (82,400) -5.31% -9.03%
1,929,000 (40,000) 1,889,000 1,556,000 347,000 236,000 (250,000) 226,000 27,000 (60,000) (31,000) (55,000) 37,000 (106,000) -3.31% -5.34%
3,419,434 (104,473) 3,314,961 2,675,052 587,469 379,666 (327,226) 362,430 137,272 (15,833) (62,598) (32,507) (15,233) 46,305 0.84% -1.64%
3,835,013 (223,390) 3,611,623 2,528,807 758,874 514,395 (190,453) 147,409 100,292 - - 13,325 11,324 28,397 1.14% -2.21%
1 ,979,821 (48,428) 1 ,931,393 1,632,666 282,91 1 267 ,699 (251,883) 147 ,037 (57 ,366) (713) (36,254) (3 ,791) 23,00 6 (93 ,734) -3 .43% - 2.83%
2,083,994 (59,648) 2,024,346 1 ,655,087 560,022 19,611 (210,374) 282,545 30,214 - (1,310) 8,106 (11 ,822) 97,359 3.51% 3.41%
558,432 13,046 571 ,478 676,535 1 15 ,325 85,817 (306, 199) 34,312 ( 18 ,276) - ( 11,668) (2,691) 51 (304,471) -31.65% -47.46%
1,884,287 (46,551) 1 ,837,736 1 ,120,127 433,016 278,936 5,657 80,784 8,089 (49,559) (10,750) (6,502) 6,422 34,141 1 .70% 3.62%
501,000 11,500 512,500 167,200 121,000 28,400 195,900 37,900 7,900 - - (2,000) - 239,700 18.47% 42.27%
624,000 (1,300) 622,700 612,100 105,400 98,600 (193,400) 68,700 34,600 (8,400) (20,600) 3,300 600 115,200 -7.25% 12.72%
54, 517 ( 17,186) 37,331 193 1,296 - 35,842 2 0,7 15 14,514 (19,179) (12,482) (9,796) - 29,614 6. 64% 7 1. 04%
543,425 - 543,425 5 99,109 323 (1, 062) (54,945) 112,855 3,516,983 (307,881) (787) (17, 855) - (104,636) -3.36% -519. 05%
4,486,329 161,425 4,647,754 4,372,570 938,361 - (663,177) 629,148 40,328 26,364 (48,949) (435,033) (68,972) (520,291) -7.61% -10.70%
1,012,773 (61 ,724) 951 ,049 861,179 97,376 169,666 (177,172) 1 18,000 48,147 21,969 (23,368) (80,126) 315 (92,235) -2.44% -16.45%
537,811 (80,949) 456,862 375,423 126,020 (4,929) (39,652) 35,666 4,641 - - (59,047) 2,072 (56,320) -5.03% -14.54%
1,835,450 (33 ,307) 1 ,802,143 1,244,401 314, 184 231,793 1 1,765 1 12 ,296 28,532 (19,991) (44,271) (66, 178) (824) 21 ,329 0.61% 0.74%
5,433,388 (106,276) 5,327,112 4,078,391 786,093 859,981 (397,353) 1 ,137,769 (199,097) - (205,592) (679,903) (59,707) (403,883) -3.77% -2.51%
53,765,314 (862,052) 52,903,262 39,353,523 9,453,416 6,122,143 (2,025,820) 6,717,088 3,145,492 (549,492) (912,097) (612,041) 1,110,478
ad aca perat.
(8) veret Rerace (Bermda), ltd aca frmat prvded th
rvey adted.
(9) terra rat excde lfe be
(10) cx ltd. cme tatemet traated frm gBP t usD averae rate
f $1.54633 fr the reevat year.
(11) cx ltd. expee rat ad cmbed rat excd X mpact 39.1%
(2010: 39.7%) ad 99.3% (2010: 89.8%), repectvey.
(12) Xis Capta d ltd. expee rat per the 10-k 31.6% fr 2011 ad
31.8% fr 2010, whch cde crprate expee f $77.1m ad $75.4m fr
2011 ad 2010 repectvey.
(13) Xis Capta d ltd. cmbed rat per the 10-k 112.3% fr 2011 ad
88.7% fr 2010, whch cde crprate expee f $77.1M ad $75.4M fr
2011 ad 2010 repectvey.
(14) Xis Capta d ltd. retr eqty per the 10-k 0.2% fr 2011,
preferred hare are excded frm th cacat.
fiscal 2011
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