Bermuda capital classes (Class of…)
Successive waves of reinsurer formation in Bermuda, each raising billions in fresh capital in the months following a major catastrophe.
On 24 August 1992 Hurricane Andrew made landfall in south Florida: some USD 15.5 billion of insured losses, more than ten US insurers insolvent, and no catastrophe capacity to be found at the next renewal. Over the following months RenaissanceRe, PartnerRe and Mid Ocean raised their capital in Bermuda. That is the Class of 1993: the Bermuda market was built in waves, each named after its year and born of a shock that had emptied balance sheets. The first, in 1985 and 1986, answered the US liability capacity crisis: ACE and XL were set up by consortia of large corporations that could no longer find an excess line. After 11 September 2001 came Axis Capital, Endurance Specialty and Allied World. After Katrina, Rita and Wilma in 2005, Validus, Lancashire and Ariel Re raised several billion dollars within months. The 2020 wave, after Covid-19, was thinner, led by Conduit Re. Fresh capital arrives quickly because the jurisdiction allows it. It leaves just as quickly when prices soften, through buyouts and mergers, and most of the 2005 names have since been absorbed.
After Hurricane Andrew in 1992 and its $15.5 billion in insured losses, about a dozen US insurers fail; in the following months, the Class of 1993 forms in Bermuda to capture the resulting hardened premiums.
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