Bermuda market to have ‘meaningful share’ of US wildfire insured losses

Written by Michael Griffiths

28/01/2025

Bermuda’s insurance market will have a “meaningful share” of insured losses from the recent California wildfires for both primary business and reinsurance, Fitch Ratings has warned.

However, the credit rating agency said that its for Bermuda-based insurers would not be affected due to “plentiful capital levels”.

A new report by Fitch suggested that underwriting results for Bermudan insurers and reinsurers could deteriorate in 2025 as premium rates are pressured and loss costs increase

It said the combined ratio could be around 90% for 2024, up on 86.5% in 2023, while catastrophe losses would represent seven to eight percentage points on the 2024 combined ratio, up from 3.2 points in 2023.

“The potential impact on reinsurance renewal pricing from the fires will depend on the ultimate level of loss and the remoteness of such an event relative to catastrophe loss expectations,” Fitch said.

“The January 2025 reinsurance renewal demonstrated that the reinsurance market cycle is past its peak, with stable to softening pricing as increased supply was more than adequate to meet higher demand.

“Fitch expects market conditions to soften further at the 2025 mid-year renewals, although risk-adjusted returns will remain favourable as underwriting discipline is maintained.”

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