Increased demand, revised catastrophe models and more stringent capital constraints continue to squeeze capacity, according to the Quarterly Report from Benfield’s Industry Analysis and Research team.

The report shows that the total net income for Bermuda’s 16 leading reinsurers was up 21% over 1Q 2005 to $2.3bn. Premium income, meanwhile, decreased 5% to $16.5bn, the first decrease in 1Q premium volume since 2001. The weighted average combined ratio decreased from 91.6% to 89.2%.

“These top line reductions are attributable to more disciplined underwriting, reduced capacity due to stricter capital requirements by rating agencies, and the transfer of business to sidecars,” said Christopher Klein, Benfield’s Industry Analysis and Research team.