ABIR: Bermuda a Reliable Partner

Bermuda reinsurance companies are reliable and responsive partners for Floridians in need of reinsurance, says the president of the president Association of Bermuda Insurers and Reinsurers (ABIR).

Bradley Kading was responding to recent withering criticisms of the Bermuda reinsurance industry in the Florida press.

The “Sarasota Herald-Tribune” had accused Bermuda reinsurers of engaging in a “legal but opportunistic” squeeze after the state’s catastrophic 2004/5 hurricane season, driving up premiums for homeowners and businessmen by doubling or tripling rates they charged Florida insurance companies.

The average cost of reinsurance coverage in Florida climbed from $9.90 per $100 in exposure to $20, the highest in the US. The average home premium increased 80 percent, reported the paper. Residents near the coast saw increases of 300 percent. More than 300,000 Florida families lost their private coverage, forced to find a new company or join the state-operated insurance scheme. The newspaper quoted one unnamed insurance Florida industry broker as calling the Bermuda reinsurers the “almost-pirates of the almost-Caribbean.”

But Mr. Kading pointed out hurricane-prone Florida required coverage for fully 60 percent of all the wind risk in the entire United States. And he said the 17 Bermuda reinsurers — who together have 37 percent of the world’s property and casualty reinsurance market — “have never been unable to pay Floridians’ claims for catastrophes.”

“There’s plenty of room for debate about how best to prepare Florida for these all-too-frequent calamities, but this debate must be informed by the facts,” he said. “ABIR and its members will continue to contribute their capital, solutions, mitigation technologies and best ideas to support a safer, stronger, more sustainable Florida.”

The “Sarasota-Herald Tribune’s” coverage of the Bermuda reinsurance industry has already drawn heavy criticism from both a Florida consumer group and the president of the reinsurance industry’s Washington lobby group.

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