In nautical terms, there is a moment on the coastal seas known as a slack tide, when the water is calm and free of significant movement in the tidal stream. There is no slack tide in Bermuda at the moment, as insurance companies eagerly await a calming business landscape and a hardening insurance market.
We’ve seen unparalleled changes in Bermuda during the past few years:
- More than 50 percent of the insurance companies offering excess liability in Bermuda have undergone significant merger and acquisition activity
- Competition and capacity have increased in Bermuda, London, and the United States
- Excess capacity is pushing attachment points up and further eroding pricing
- The energy sector, a large limit purchaser, is in distress. This results in lower exposures and premium
The Bermuda excess markets are not sitting by the shore waiting for the market cycle to change. They are adapting to these leaner times. A few examples:
- Markets are reaching out to brokers with specific companies they would like to insure
- Bermuda excess casualty participants are also actively looking at their books of business to leverage existing placements
- Markets are changing their business models. For example, one market that previously specialized in the Energy sector is now writing transportation and rail risks
Meanwhile, increasing competition is prompting markets to adapt to buyer preferences by writing more business on a follow-form occurrence basis. They’re also lowering minimum premiums at or below $2,000 per million, and they are increasing or decreasing their limit to gain and retain customers.
With these changes in the Bermuda excess casualty landscape, brokers and clients need to adapt their strategies to improve their programs. How?
- Engage markets early with ideas and improvements. Never assume they cannot offer a product or coverage
- Tell your story. You know your company best and can help differentiate it to get the best deal
- Revisit existing placements to correct past issues and expand existing coverages
- Test the Bermuda markets with new business you think they may not consider
While Bermuda excess carriers are searching for calm in the chaos, they are successfully winning new deals and fending off competition. As a result, clients benefit from improved terms and pricing. A slack tide never lasts long, so now is the time to seek improvements in your excess casualty program and test the Bermuda market.