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Reliable, Innovative, Safe, Catastrophe Reinsurance

Reliable, Innovative, Safe, Catastrophe Reinsurance. Brad Kading September 2009 CEI Out of the Storm. Association of Bermuda Insurers and Reinsurers . 24 Class 4 Companies Highly capitalized, distinct regulation $61 B GWP, $65 B Surplus (YE 2008)

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Reliable, Innovative, Safe, Catastrophe Reinsurance

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  1. Reliable, Innovative, Safe, Catastrophe Reinsurance Brad Kading September 2009 CEI Out of the Storm

  2. Association of Bermuda Insurers and Reinsurers • 24 Class 4 Companies • Highly capitalized, distinct regulation • $61 B GWP, $65 B Surplus (YE 2008) • Headquarters in Bermuda with principal operations in Bermuda, the US and Europe • Worldwide business enterprises • 1,800 employees in Bermuda; 15,000 US; 30,000 worldwide

  3. Bermuda Market Impact • Largest property cat reinsurance market • Supplies 40% of the US and EU market • Largest cat reinsurer in the world: Renaissance Re • Highly capitalized, excellent claims payment history • Tested by the worst of Man (9/11) and Mother Nature (2004 and 2005 US hurricane season) • Regulated to tough standards: • Mandatory stress and scenario tests and explicit RBC cat charge • Regulatory MOU’s: NY and FL; UK and the IAIS

  4. Katrina, Rita, and Wilma

  5. Florida – 93% International

  6. Texas Cats

  7. Reinsurers’ Track Record • Post Hurricane Andrew: • $500 M limits (5 times previous) • Securitizations • New capital/companies • Cat Models • Derivatives • CEA – record placement • Post 9/11: • New capital/companies • Hedge fund vehicles • ILW’s • Terrorism cover • Post Katrina: • New capital/companies • Sidecars • Derivatives reborn • Post Financial Crisis: • Financially strong, stable • Capacity maintained vs.: • Securitizations down • Cat Fund bonding impaired

  8. $3 B in Cat Bonds Expected 2009

  9. HR 3424: Brattle Group/Cummins’ Conclusions Enactment of the discriminatory reinsurance tax bill will: Lead to the elimination of affiliated reinsurance for non US groups Lead to a 20% reduction in overall US reinsurance market supply Lead to a 1 to 2 % drop in supply of primary insurance Lead to $10-$12 billion annual increase in US insurance costs

  10. ABIR Members ACE Allied World Argo Group Ariel Re Arch Aspen Assured Guaranty Axis Catlin Endurance Flagstone Re Harbor Point Hardy Hiscox Lancashire Max Capital Group Montpelier Re Partner Re Platinum Re Renaissance Re Torus Validus Re XL Capital

  11. ABIR Bradley Kading President and Executive Director Bradley.Kading@ABIR.bm Leila Madeiros Vice President and Corporate Secretary Leila.Madeiros@ABIR.bm WWW.ABIR.BM

  12. Bradley Kading Association of Bermuda Insurers and Reinsurers

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