NEWS

Everest eyes a diversified Bermuda

Bermuda has evolved from a property cat hub to a broader and diversified market for Everest Re.

Bermuda has changed in the last five years from being a hub mainly for property catastrophe reinsurance into a broader and diversified market, Peter Bell, senior vice president, chief executive officer and managing director of Everest Reinsurance (Bermuda), told Monte Carlo Today.

Everest in Bermuda has seen its income increase from about $700 million in 2017 to $1.4 billion now, and most of that is “not from property”, said Bell, who joined Everest in 2003 and was promoted into his current role in July last year.

“We’ve moved up in our casualty, mortgage and Lloyd’s capital, and even though property is a core part of our business, it’s definitely not the part that it was. It hasn’t been reduced; it’s just that we’ve grown bigger in a lot of other areas,” he explained.

Everest Re’s overall reinsurance gross written premiums have now reached close to $9 billion but, he said, within that growth, the property business has remained “relatively flat”. The company has always been active in casualty lines, but it has managed to “move them substantially as the rates have moved”, he added.

Everest is one of the main leaders in mortgage reinsurance, which it centralises in Bermuda. “We have managed to deploy a huge amount of capacity in this line over the last couple of years, because we see it as a very profitable business. And we’re one of the few people that can do it, because we have the experience,” Bell said.

Market conditions in property cat six months ago could be described as a hardening market, he said, but now it is becoming a hard market.

“Where we write the cyber business can be in any of the different hubs.”
Peter Bell

“We think it is sustainable for the next year or so. A lot of companies have either pulled down or have de-risked a lot more than we have, plus insurance-linked securities is uncertain for a number of different reasons, and on top of that, there’s increased demand.

“If you can’t put all those together, it makes very simple supply:demand economics, and it’s going to be a hard market.”

On inflation, Bell said that a reinsurer would normally account for 4 percent, but now this is closer to 10 percent.

“That does make a difference. We’ll be able to offer capacity, but we’re not going to offer a lot more capacity, depending on price, terms and conditions. It creates more of an issue for the cedants because they’re going to have to buy more and there probably isn’t that much more available. It means they’re going to have to retain more,” Bell explained.

On other lines, Everest Re has appointed a global head of cyber reinsurance: Catherine Rudow, who will report to Jill Beggs, head of North America reinsurance.

“From a reinsurance perspective within Everest, we’ve had very limited cyber because we’re still trying to understand exactly what the coverage is, the systemic part of it, the aggregations.

“The most recent hire is to be the global head of that. Where we write the cyber business can be in any of the different hubs. It is all part of creating a strategy and that will evolve over time,” he concluded.

Main image: Shutterstock / aquariagirl1970