Montpelier Re, braced by $100mn investment, leads Bermudian rally

Investors also appeared receptive to the idea of a flurry of M&As among the island’s insurers to create financially stronger firms

A number of the Bermudian insurance and reinsurance stocks gained strongly in the fortnight ended 15 June. This follows more tentative signs of recovery in the sector over the previous fortnight. By contrast, the downward spiral that has taken hold of European and Asian stocks intensified. The most significant Bermudian gains were posted by Montpelier Re and Axis Capital (up 6.6% and 6% respectively), but Renaissance Re, Aspen and Catlin also gained appreciatively. Financier Wilbur Ross, of course, is making a $100mn investment in Montpelier Re and investment analysts were fairly receptive to the prediction by XL chief Brian O’Hara (at a recent S&P seminar) of a series of merger and acquisitions among the island’s insurers to create companies with the necessary scale and diversification to “ride out the bumps” of future natural catastrophe losses. But a great deal depends on the losses incurred during this hurricane season. Any M&A activity is likely to be early next year.