Bermuda market analysis: A time for caution

When a seasoned industry professional dispenses advice like: “Get through the year”, it’s a good indication that difficult times may lie ahead.Those were the words of John Charman, president and chief executive officer of Axis Capital, at a Standard & Poor’s (S&P) conference in New York in June while discussing a particularly hazardous time to be entering hurricane season in the US.Last year hurricanes Ike and Gustav cost the industry around $20bn and $4bn respectively. But it was the global financial crisis and the resulting investment losses that really hurt insurance companies.Capital across the industry has diminished on average between 10% and 15% from the beginning of 2008. But, unlike in previous years, a full-blown hard market has failed to materialise in the aftermath of last year’s events.Underwriters often approach this time of year with bated breath. But this year more than most they have reason for concern. Access to...