The total assets of Bermuda's insurance industry grew seven percent in 2008 — even after global financial markets crashed — figures released yesterday showed.

Financial regulator the Bermuda Monetary Authority (BMA) said yesterday the combined assets of all the Island's commercial and captive insurers was $472.9 billion at the end of 2008, up from $442.2 billion a year earlier.

Many of the Island's property and casualty insurers made huge investment losses in 2008 and were simultaneously hit with claims arising from catastrophes including the September hurricanes Gustav and Ike.

The Bermuda market also experienced a growth in numbers in 2008 — with 40 new re/insurers incorporating — which helped to boost the market's total assets.

While figures are not yet available for 2009, results published so far by public companies suggest that many enjoyed a record year, as rebounding asset values and a lack of catastrophes boosted profits. Many have seen their book values rise by more than 20 percent, suggesting that the market's total assets at the end of last year likely exceeded half a trillion dollars.

The BMA numbers show that gross premiums written (GPW) totalled $123.5 billion, achieving the similar volume of business of $124.4 billion written the previous year, despite the challenging economic conditions. Of that total, the commercial sector wrote $103.4 billion in GPW and the captive sector $19.6 billion. Jeremy Cox, the BMA's chief executive officer, said: "The Bermuda market continued to record impressive results in challenging economic conditions.

"The market has faired very well, reporting significant results both in underwriting premiums and total assets. We're pleased to see that the commercial sector remains strong.

"In addition, the almost $20 billion in gross premiums written by the captive sector in a soft global market, and the total number of 885 Bermuda captives, supports Bermuda's position as the leader among captive domiciles.

"While some companies did experience losses over the past year impacting capital levels, the market still remains highly capitalised and these losses were primarily related to impairments within their investment portfolios, in line with global trends.

"Overall, these results indicate the continued resilience of the Bermuda market, and ongoing confidence in Bermuda's position as a leading centre for insurance and reinsurance business globally." Incorporations increased slightly to 42 new re/insurers in 2009, with most of the newcomers a combination of captive and commercial insurers within the Class 3, 3A and 3B sectors. The companies covered various lines of business, including property and catastrophe and professional liability; there was also increased interest from the life insurance sector, which in turn brought increased assets and new capital to the market. The greatest proportion of business came from the US during 2008, with respect to both the captive and commercial markets.

Mr. Cox also noted that "the continued disciplined underwriting by Bermuda firms throughout the year, as well as the Authority's proactive and measured approach to supervision, has assisted the jurisdiction in weathering a tough financial storm."

Class of Insurer No. of Co.s Gross Premiums Net Premiums Total Assets Capital and Surplus

Class 1 309 $3.277 billion $2.135 billion $15.603 billion $10.135 billion

Class 2 322 $7.858 billion $6.431 billion $38.518 billion $15.134 billion

Class 3 343 $18.358 billion $15.913 billion $69.875 billion $24.28 billion

Class 3A 124 $15.461 billion $11.468 billion $54,159,037,491 $13.871 billion

Class 3B 19 $13.262 billion $9.676 billion $39.172 billion $14.813 billion

Class 4 37 $33.621 billion $30.557 billion $143.575 billion $58.656 billion

Long-Term 86 $31.727 billion $31.727 billion $112.064 billion $19.922 billion

Totals: 1,240 $123.564 billion $107.906 billion $472.967 billion $156.811 billion

* Class 3 sector reclassification took effect as of 2008-Q3. Therefore, data reported from that date will reflect the reclassified

Class 3 company categories.

Class 1 - Single-parent captive insuring the risks of its owners or affiliates of the owners.

Class 2 - (a) a multi-owner captive insuring the risks of its owners or affiliates of the owners; or (b) a single parent or multi-owner captive: (i) insuring the risks arising out of the business or operations of the owners or affiliates, and/or (ii) deriving up to 20 percent of its net premiums from unrelated risks.

Class 3 - Captive insurers underwriting more than 20 percent and less than 50 percent unrelated business.

Class 3A - Small commercial insurers whose percentage of unrelated business represents 50 percent or more of net premiums written or loss and loss expense provisions and where the unrelated business net premiums are less than$50 million.

Class 3B - Large commercial insurers whose percentage of unrelated business represents 50 percent or more of net premiums written or loss and loss expense provisions and where the unrelated business net premiums are more than $50 million.

Class 4 - Insurers and reinsurers capitalised at a minimum of $100 million underwriting direct excess liability and/or property catastrophe reinsurance risk.

Long-Term - Insurers writing long-term (or life) business.