“We've been through the crucible of fire and come out stronger”, said XL Capital chief operating officer Henry Keeling.
Apart from replenishing its capital by $3.2bn following a gross loss from hurricanes Katrina, Rita and Wilma of $653.2m, the firm has reduced its overall catastrophe exposure and set up sidecar Cyrus Re.
Keeling feels confident that if there was a re-run of Katrina today the impact would be reduced by 30%-40%.
Keeling welcomes alternative capacity sources like sidecars and said the “interaction between the capital markets and traditional reinsurance was very positive for the industry”.
He told Global Reinsurance that by nature of its DNA “Bermuda is more open to these things”, but pointed out that European reinsurance giant Swiss Re is currently industry leader in terms of alternative risk transfer and that there are plenty of other “forward thinking people” in other jurisdictions. Looking ahead to the 1 January renewals he said his main concern is long tail lines as the “short tail takes care of itself”.
Commenting on how the firm is currently positioned he said it was an exciting time with XL's new repositioning in Europe with the opening of XL Re Dublin (to take advantage of Ireland's adoption of the Reinsurance Directive), further diversification os its portfolio and the growth of its US life business among other things.
