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Bermuda Fire & Marine grossly under-estimated run-off costs

The management of Bermuda Fire & Marine Insurance may have underestimated the costs of running off the failed insurer’s international business by as much as $23 million, according to liquidator Ernst & Young. When breaking up the company in 1991 in order to protect its profitable domestic business from the debts of its international arm, only $1.7 million was left behind to pay Bermuda Fire’s run off costs.