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Bermuda's Leaders Part II - Service Providers & ILS Specialists 2016

As Bermuda is one of the world’s largest reinsurance hubs, ILS is becoming a major driver of new economic activity and employment on the Island. How do you anticipate Bermuda will continue to adapt and evolve? Access to risk for ILS funds has become critical. The barriers to entry in reinsurance markets are high. This is a relationship business where reinsurance buyers and intermediaries seek to transact with markets that have the size and sophistication to provide large, comprehensive solutions to risk programs. Having both a substantive reinsurance market as well as a developed fund industry gives Bermuda a competitive advantage to continue to innovate in ILS. What will be the main areas of growth for the Island’s risk transfer market? I believe it is now the prevailing view that ILS represents a structural shift in the way capital will enter re/insurance markets. A recent economic impact study commissioned by the Bermuda Business Development Agency estimated that Bermudian-based ILS funds have a total economic impact on the Island of $734 million and at least 400 jobs were created in Bermuda during 2015 by the industry. With a growth rate of 30 percent over the previous year, ILS has to be seen as the major growth driver of the Island’s risk transfer market. What are the main challenges you see ahead? Bermuda has demonstrated its ability to adapt but there will always be some factors outside its control. Brexit is an obvious source of uncertainty. With standalone Solvency II equivalence and progress on the Alternative Investment Fund Managers Directive, which will help Bermuda funds get better access to the EU, the Island is well placed to weather this disruption. BERMUDA’S LEADERS PART II Richard Lowther joined as the chief operating officer of Hiscox Insurance Linked Strategies in early 2014 to help develop the group’s Kiskadee ILS management platform in Bermuda. He has a detailed understanding of the unique structuring, operational and governance requirements of the hybrid reinsurance ILS manager model. In this role, he is responsible for helping with the build-out of the asset management structure, products and related operational processes of the group’s ILS funds and managed accounts. Lowther is actively involved in capital raising and business development for ILS, which has seen assets under management grow to over $1 billion since launching in 2014. Prior to joining Hiscox, he was the COO of Validus Re’s Bermuda ILS platform, AlphaCat Managers, since its formation in 2008. He has been involved in the Bermuda re/insurance market since 1998, working as executive vice president and partner with the Capital Markets Management division of JLT Insurance Management from 2000 to 2008 and Marsh Management Services from 1998 to 2000. He holds a CA/CPA designation and a BA in economics from the University of Victoria, Canada. Do you believe Bermuda will remain a risk transfer hub? Bermuda has long benefited from geographic proximity to US and European markets, a stable, developed economy and strong infrastructure. Combined with a ‘right-sized’ regulatory and tax environment, the Island has been able to evolve into a sophisticated reinsurance market surpassed only by London and New York. The fast-paced growth in ILS in Bermuda is a continuation of this evolution. ILS has grown from a niche asset class into a major disruptive force in global reinsurance markets. The fact that Bermuda is at the forefront of ILS is not a coincidence. “With a growth rate of 30 percent over the previous year, ILS has to be seen as the major growth driver of the Island’s risk transfer market.” Richard Lowther Job title: Chief operating officer Company: Hiscox Insurance Linked Strategies 34 2016 Bermuda:Re/insurance+ILS


Bermuda's Leaders Part II - Service Providers & ILS Specialists 2016
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