CEO SURvEy:
CAN BERMUDA
AND LONDON BE
PARTNERS?
Competition, rivalry or partnership? We asked a series of questions to help define the way in
which Bermuda’s top people view the relationship between London and Bermuda.
No one, least of all the knowledgeable senior executives who participated property catastrophe reinsurance business in a market where pricing had
in this survey, would deny that Bermuda and the London market (and more dramatically hardened, post-9/11.
specifically Lloyd’s) are the most vibrant re/insurance markets in the world.
The first Syndicate to set up in Bermuda was Catlin, although it got off
Given the virtually moribund state of most other markets (those of Germany
to a slow start. Aspen (spun off from Wellington) and GoshawK followed.
and Switzerland excepted), that’s no great compliment.
They, in turn, were followed by Amlin and Hiscox in 2005. Most recently,
But is the relationship between London and Bermuda best characterised Advent, Brit, Kiln and Omega have started operations in Bermuda or vowed
as synthesis or competition? To explore the subject, we asked the to do so.
following question:
The one company reversing this trend during this period was the Bermuda-
With a surplus of capital from 2006, will Bermuda’s re/insurers continue to based Imagine Group, which acquired Greenwich, Danish Re and Abacus
turn their attention to greater capacity at Lloyd’s? Should the better-managed Underwriting Agencies at Lloyd’s between 2003 and 2005.
London Syndicates expect to see increased attention from the Bermuda
The most recent cycle has seen three Bermuda re/insurance companies
companies? Which Syndicates are the most likely targets, and which lines of
extend their platforms into Lloyd’s. During the last few months, Validus
business are the most attractive?
Re acquired Talbot Holdings, Ariel Re acquired Atrium Underwriting, and
First, some background. James Kent, executive vice president of Willis Montpelier Re established Syndicate 5151 as a new entity, trading from
(Bermuda) Limited, helped us to analyse the history of the relationship July 1. The common view is that this trend is set to continue.
between the London and Bermuda markets.

That relationship has experienced three distinct cycles of development, here are the individual views of our contributors on the ways in which
ACE and XL Capital were the first of the major companies to be formed in
the relationship is set to develop:
Bermuda, in the mid-1980s. When they were looking to grow their overseas James Kent—Executive vice president
operations a decade later, Lloyd’s of London was an obvious port of call. Willis (Bermuda) Limited
In 1996, ACE acquired Ockham Worldwide and Methuen Underwriting, The two markets have been partners in the past, continue to be partners
while Mid Ocean (by then a subsidiary of XL) acquired Brockbank. Two in the present, and almost certainly will be partners in the future. The main
years later, ACE acquired Tarquin Limited and formed Ace Global Markets reason for their partnership is that companies will always want to take
in London. This meant that, by the end of the 1990s, ACE and XL between advantage of the benefits arising from both London and Bermuda, rather
them managed close to 15 percent of the total underwriting capacity at than being restricted to only one location.
Lloyd’s.
These and other factors show the strong corporate relationship that exists
Fast forward to 2002, after the events of September 11, 2001, and Lloyd’s between the two markets. There is also a more personal trading relationship
Syndicates had begun to expand their operations by establishing separately between the two markets. The vast majority of Lloyd’s Syndicates buy
capitalised companies in Bermuda, primarily to write US and international reinsurance and retrocessional protection from Bermuda reinsurers, and in
Bermuda Re/insurance . September 2007 19
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