Bermuda-based reinsurers are increasingly moving into casualty lines, impacting upon more established players, according to market analysts.
The cash-rich Bermudans, who have focused on writing property and short-tail liability business since their arrival in the market, are now diversifying into casualty, threatening traditional European reinsurers.
AM Best London general manager Jose Sanchez-Crespo said the move would cause the softening in casualty lines to accelerate as the amount of capacity in the market increased, while Standard & Poor's (S&P) credit analyst Stephen Searby said that the change in strategy could "spoil the party" for established players
Searby added that concern over the impact of the Bermuda-based reinsurers was the reason S&P recently changed the outlook for Swiss Re to negative, in contrast to the stable outlook for the global reinsurance industry as a whole.
Swiss Re chief executive John Coomber admitted it was seeing the effect of the Bermuda-based players branching out into liability. He said: "Will it put pressure on us? Yes." But Coomber maintained that due to its age and size, Swiss Re "retains certain advantages".
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