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Bermuda Reinsurance Leaders 2016

Charles Cooper, chief executive of reinsurance at XL Bermuda, calls Bermuda, with its history of innovation and robust regulatory regime, a thoughtful risk-taker. He also singles out ILS as being a good example of how Bermuda has come to dominate certain new areas of risk transfer because of this approach. “Bermuda continues to lead innovation in the ILS world and that will continue because of the underwriting talent here and the ability to innovate and provide rapid solutions to problems as they evolve,” Cooper says. “Bermuda has a reputation of being a thoughtful risk-taker. Now that Bermuda has Solvency II equivalence, the reputation of Bermuda in the insurance world has been further strengthened. It is right up there with London and New York. A lot of goodwill goes along with that reputation.” Rob Wyatt, chief executive of MS Amlin AG Bermuda Branch, says that Bermuda’s success is built on three core factors. “We continue to attract top talent. Second, we have a highly sophisticated, flexible and entrepreneurial view towards risk. Third, we continually look to adopt new approaches to providing solutions to clients’ needs. This is all combined with a favourable and constructive regulatory environment. It is this unique combination of factors that has made Bermuda successful and will continue to underpin our success,” he says. Adapt and thrive Mark Watson III, chief executive, Argo Group, adds that while Bermuda is a hub for re/insurance, providing the majority of high excess liability insurance capacity for global Fortune 1000 companies, the key to the future will be adaptability. “As in many industries, the keys to success lie in being proactive in the face of change. And it’s no different in Bermuda, where the risk transfer landscape is continually changing,” Watson says. “As the global capital markets get more comfortable with investing in ILS, Bermuda will need to continue embracing the capital markets and further develop mechanisms that make such investments efficient. There is growing opportunity to look to the capital markets and work together to address global insurance needs.” Kathleen Reardon, chief executive, Hamilton Re, agrees that adaptability is key. “The Bermuda market has survived and thrived because of its ability to respond quickly to changing market conditions. I don’t see this changing,” she says. “A new dynamic in market sustainability is the manner in which Bermuda companies embrace technology to improve their risk selection and underwriting processes. I see solid evidence that technology will be a determining factor in Bermuda adapting to a new risk landscape.” BERMUDA’S REINSURANCE LEADERS allowed third party capital to enter the industry so easily, and with lower frictional costs, means that the industry as they know it is changing rapidly. With this in mind, the industry will require a new set of leaders to embrace this fundamental change and use it to their advantage. This is the core basis of this special report by Bermuda:Re+ILS. We asked our in-house editorial teams and the many experts and advisers we speak to daily to help us identify those individuals within reinsurers who will help change take place—for the better of both the industry they work in and society as a whole. Our quest also focused on individuals who will mould the industry going forward—as opposed to having shaped it in the past. All these individuals are from reinsurers— separate lists of influential service providers and insurance-linked securities (ILS) and funds experts was published in the November issue and also online. Two themes that pervade most of the commentaries are optimism around the future of risk transfer and Bermuda’s role within that, and also the vital importance of Solvency II equivalence. John Rathgeber, chief executive of Watford Re, for example, believes that Bermuda is fast becoming a melting pot for a heady mixture of talent and risk transfer innovation which will see the industry continue to evolve with Bermuda at the heart of things. While he does not believe all new strategies and innovations will succeed, he thinks Bermuda will win either way. “Bermuda will retain its prominence as a centre for risk-taking, risk management, and the provision of services related to these activities. Bermuda has always had a robust and pragmatic regulatory framework but the attainment of Solvency II equivalence greatly solidifies Bermuda’s reputation and credibility as a significant insurance jurisdiction,” Rathgeber says. “Historically, Bermuda has been receptive to new ideas and structures for transferring and assuming risk as long as the business plans made economic sense and the management teams could demonstrate the expertise to execute those plans. “It will be fascinating to watch as consolidation activity continues to reduce the number of companies on the Island while, at the same time, new companies and alternative vehicles are being formed with unique, somewhat untested business models. “The spectrum of new strategies we’re seeing is extremely interesting to observe. There are many more variations in asset strategies being employed, variations in how business is sourced and underwritten, and variations in targeted lines of business. If Darwin were alive today he might choose Bermuda over the Galapagos for developing his evolutionary theories.” 5 2016 Bermuda:Re/insurance+ILS


Bermuda Reinsurance Leaders 2016
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