Bermuda's re/insurance industry is starting to show signs of recovery, if the second quarter of 2009 results are anything to go by.

Having suffered from exposure to Lehman Brothers, Merrill Lynch and American International Group, as well as claims payouts for Hurricanes Ike and Gustav in previous quarters, 12 of the Island's top 20 re/insurers recorded an increase in profits over the same period last year, while 13 saw the amount of their gross premiums written rise during that respective time.

This was despite some firms taking a big hit from the Air France plane crash off the coast of Brazil, while, on the flipside, those who adapted well to the ever-evolving economic environment took advantage of the plight of their larger competitors by picking up business at their expense. Many who had written down investments in previous quarters even saw the value of their assets start to rise again.

Meanwhile most companies posted a significant rise in book value per share of around 10 percent, ranging between five percent and 35 percent.

Sound investments in the insurance market were reflected in the Standard & Poor's 500 Index, which gained 15.93 percent - it's best quarterly return since 1998, led by a rebound in the financial sector by 35 percent, backed up by US investment-grade and high-yield corporate bonds, which produced stock-like total returns of 9.47 percent and 22.55 percent respectively, as measured by Citigroup indices.

In general, firms whose core business is insurance reported a fall in net income, while those which focus on reinsurance enjoyed a growth in profits compared to the previous year.

Elsewhere, re/insurance companies with a solid investment portfolio experienced a good return on their capital, with a sizeable set of shareholder equity results.

PartnerRe and White Mountains shared top spot for the biggest increase in net income, both up 95 percent, while Validus Holdings boosted its profits by 81 percent as the third biggest winner.

Assured Guaranty and XL Capital saw the most significant reverses, the former dropping in net income by 69 percent and the latter to the tune of 66 percent.

As far as gross premiums written were concerned, Argo Group and Assured Guaranty both came out joint first with a 60 percent rise, closely followed by Flagstone Re, which advanced 21.2 percent.

But PartnerRe, which did so well in terms of profits, experienced a 13 percent decline in gross premiums, while XL was down by six percent also, as insurance rates dropped across the market.

However, Primus Guaranty topped the tree where book value per share was concerned, up 35 percent in the second quarter 2009 on the first quarter of this year, while XL increased by 21 percent, and Aspen climbed 17 percent.

Argo Group had the lowest rise in book value per share of five percent, just below Flagstone, Max Capital and Validus - all up six percent.

Probably the best all-round quarter was had by RennaissanceRe, which saw its net income increase by 50 percent, gross premiums written by 5.9 percent and book value per share by 10 percent. Other steady performers included IPC Holdings and Everest Re.