BERMUDA INSURERS REVERSE 2008 LOSSES WITH HUGE POFITS IN

UNCLAS HAMILTON 000032 SIPDIS SENSITIVE EUR/CE (J. MARBURG AND D. PARADISE); EUR/PPD (L. MCMANIS AND A. PIPKIN); LONDON (R. HUBER AND R. ESCOBAR); E.O. 12958: N/A TAGS: ECON BD SUBJECT: BERMUDA INSURERS REVERSE 2008 LOSSES WITH HUGE POFITS IN 2009 ¶1. (U) The February 22 edition of the daily Royal Gazette reported that 17 U.S.-listed property and casualty re/insurance companies based on the Island reversed 2008 losses of just over USD one billion with high profits of USD 11.7 billion in 2009. The list of 17 did not include London-listed insurers or the 900 plus concerns in the captive insurance sector, which provide self-insurance for their own companies. The companies achieved their stellar earnings partly because of the rebound in the global financial markets that had crashed in 2008, resulting in higher returns on their large investment portfolios, and partly because there were fewer catastrophes in 2009. In comparison, 2008 hurricanes Gustav and Ike generated USD 20 billion in insurance claims. The 2009 profits should serve to bolster the local economy as the insurance companies in Bermuda awarded large bonuses, according to the daily. The paper predicted, however, a return to smaller profits in 2010 as claims from winter storms start coming in. SHELTON