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Bermuda Reinsurance Leaders 2016

testament to this was the decision of the European Commission to find Bermuda and the Bermuda Monetary Authority to be fully equivalent under the Solvency II regulatory framework. By continuing to be attentive to the needs of international businesses and welcoming new companies and talent, Bermuda stands to benefit from the changes occurring in the industry, whatever they turn out to be in the future. What will be the main areas of growth for the Island’s risk transfer market? There is a certain amount of fatigue in the insurance-linked securities (ILS) investment community regarding US wind risks, which represent the largest part of the risk transfer market. Investors are interested in greater diversification in order to grow their investment in reinsurance and balance their exposures across risk types. The areas of growth in the shorter term include peak perils in emerging markets, specialty lines and weather risks where risk transfer solutions can be packaged as an investment. Another area of future growth, but over the longer term, lies in the closing of the gap between economic and insured losses resulting from natural or manmade events where new innovative risk transfer solutions and channels of distribution are needed, especially in emerging markets. I also see growth opportunities in the packaging of reinsurance risks into innovative investment products and the development of new platforms and processes allowing the efficient execution of risk transfer solutions. What are the main challenges you see ahead? For many investors, ILS remain a new and unknown asset class. The lack of knowledge of the space is the biggest challenge and we are experiencing it first-hand. We at Sequant Re are not losing sight of the fact that we are not only in competition with other established ILS players but also with other types of alternative investments investors can choose from. The growth potential is there but education and patience is required to broaden the reach of ILS as an asset class. Advances in risk modelling and underwriting remain significant challenges as we seek to diversify in business lines outside the peak zone risks where models are well established and accepted. Information, open channels of communication, sound analytics and transparency will be fundamental in growing investors’ trust and support as the ILS market expands. “I also see growth opportunities in the packaging of reinsurance risks into innovative investment products.” BERMUDA’S REINSURANCE LEADERS Prior to moving to Bermuda in 2001, Guy Cloutier served as chief actuary and CEO in various insurance companies, including the Insurance Corporation of British Columbia, OSFI, Alberta Workers’ Compensation Board and Elite Insurance Company in Vancouver, British Columbia. He is the founder of Canadian Direct Insurance, a federally-licensed insurance company and the first direct insurance writer in Western Canada. Sequant Re is his brain child and the culmination of his extensive experience in the industry. Do you believe Bermuda will remain a risk transfer hub? What has made it so successful in this sphere? Bermuda has maintained for many years a very proactive, flexible and responsive regulatory approach to reinsurance and risk transfer vehicles. I found that the regulatory framework was particularly well suited to the concept I had in mind for Sequant Re. I doubt I could have replicated the same business model with the same ease in another jurisdiction. Bermuda also has an exceptional infrastructure to support the risk transfer business. This comes from the high concentration of talent and top-quality service providers in all sectors. The market for local talent is developing but also the government recently introduced immigration regulations making it easier for new businesses to get started. The proximity to the US and the close ties to the UK reinsurance markets are also considerable advantages for Bermuda. How do you anticipate Bermuda will continue to adapt and evolve? Bermuda is very well equipped to regulate the formation and monitoring of all major risk transfer vehicles, from traditional reinsurance companies to the new structures of sidecars, collateralised reinsurance and cat bonds. Bermuda’s reputation as an effective regulator in the field is widely accepted: “I also see growth opportunities in the packaging of reinsurance risks into innovative investment products.” Guy Cloutier Job title: Founder and chief executive officer Company: Sequant Re 12 2016 Bermuda:Re/insurance+ILS


Bermuda Reinsurance Leaders 2016
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