Many of what were once casualty only markets are now offering property coverage. Satellite insurance capacity is now available. Companies are also realizing that their target market can be expanded beyond the Fortune 1000 sector by offering a pared-down version of both policy coverage and price which is prompting interest from smaller corporations with less revenue. Most of these companies, originally mono-line catastrophe companies, now have diversified into other areas of coverage. All the Bermuda CAT companies write their business on a net line basis.
Nothing goes out the back door to the retrocessional market.
They therefore do not have to deal with one of the biggest problems facing the industry, uncollectible reinsurance. Unwilling to jeopardize their own financial capability by relying on that of an outside market, which may not in fact be as sound, they look to capital levels, conservative asset management and a low premium to surplus ratio as the cornerstones of financial strength. While these reinsurers ordinarily acted as following markets, more frequently than not, they have now taken lead positions. It is doubtful that the Island's CAT capacity will develop as a cohesive market like Lloyds, where following markets rely on the underwriting of leading markets and do less analysis themselves. Much like the commercial treaty reinsurers in Bermuda in the 70's and 80's, each company will underwrite each submission on its own merits and will only support risks which are adequately rated.