Reinsurance industry is experiencing significant developments

Bermuda Regulator Enhances Transparency Requirements

The Bermuda Monetary Authority (BMA) plans to mandate increased transparency from life insurers regarding their investment portfolios. This initiative responds to global concerns about risks in offshore reinsurance deals, especially following the crisis involving Bermudian reinsurer 777 Re. The BMA aims to require life and annuity insurers to disclose comprehensive investment details annually, reinforcing Bermuda's commitment to informed stakeholder decisions and regulatory confidence.

Natural Catastrophes Drive Insured Losses Above $135 Billion

The Swiss Re Institute reports that global insured losses from natural catastrophes in 2024 are expected to exceed $135 billion. This marks the fifth consecutive year with losses surpassing $100 billion, attributed to factors like urban value concentration, economic growth, rising rebuilding costs, and climate change impacts. The U.S. accounts for two-thirds of these losses, with significant contributions from hurricanes Helene and Milton.

Utah Orders A-Cap Insurers to Cease New Business

Utah regulators have directed three insurers within the A-Cap group to halt new business due to financial instability linked to loans to Miami's 777 Partners. The Utah Insurance Department identified that Sentinel Security Life Insurance and its reinsurers are in a precarious financial state, risking liabilities far beyond their capital. A-Cap plans to challenge the order, disputing the financial analysis.

IAG Acquires Majority Stake in RACQ's Insurance Operations

Insurance Australia Group (IAG) has announced an $855 million deal to acquire 90% of RACQ's insurance operations, with an option to purchase the remaining 10%. This acquisition adds $1.3 billion in gross written premiums to IAG's portfolio and includes a 25-year exclusive distribution agreement with RACQ, enhancing IAG's presence in Queensland.

AM Best Affirms Ratings of Bermuda’s Orion Reinsurance

AM Best has affirmed the credit ratings of Orion Reinsurance (Bermuda) Ltd, a Class 3 captive insurance company established in 2004. The affirmed ratings reflect Orion Re's strong balance sheet, adequate operating performance, limited business profile, and appropriate enterprise risk management.

These developments highlight the dynamic nature of the reinsurance industry, with regulatory changes, significant financial impacts from natural disasters, corporate acquisitions, and financial stability assessments shaping the current landscape.