Diversification pays off

Reporting their results, all reinsurers were at pains to reassure investors of their minimal exposure to sub-prime assets through their investment portfolios and apart from XL Capital, disclosed losses were generally negligible

The 2007 financial results of Bermudian reinsurers seem to vindicate the merits of diversification. Validus, in only its second year of operations, became the most profitable reinsurer on the island because of its acquisition of Lloyd’s underwriter Talbot halfway through 2007.