Ratings agency AM Best forecasts an average return on equity (ROE) of 10% for the Bermudian insurance and reinsurance market this year thanks to a “solid underwriting performance”.

While Hurricane Sandy remains “somewhat of a wild card”, even in a “worst-case scenario, most Bermuda market companies should be able to hold their footing based on results through the first nine months of the year”.

The 10% forecast for the calendar year compares with ROE of 16% in 2009 and 19% in 2006. But AM Best says the result is relatively good following the global financial crisis and amid low yields on long-term US Treasury bonds, a major asset class held by much of the Bermudian market.

The market is on track to write record net premiums in the year, with a third-quarter figure of $US40.3 billion ($38.4 billion) only slightly below $US49 billion ($46.7 billion) for the whole of last year.