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

past, continue to make Bermuda an attractive location for lower-cost ILS capital and hedge fund re vehicles. Bermuda reinsurers were the first to systematically adopt advanced modelling technology for catastrophe risk to construct optimal catastrophe risk portfolios that have generated attractive risk-adjusted returns since the early 1990s. These companies continue to invest in technologies that enable better risk selection, more efficient claims handling, and lower distribution cost in a broad range of re/ insurance businesses. What will be the main areas of growth for the Island’s risk transfer market? Narrowing the coverage gap in catastrophe risk—the difference between exposure and re/insurance protection. The gap is significant in both developed and developing markets. Lower-cost ILS capital has the potential to stimulate demand for re/insurance and narrow the coverage gap. The world has become increasingly connected by the internet. This has created new types of systemic risks. Systemic risks always require a greater amount of capital to re/insure than idiosyncratic ones. This represents a great opportunity for re/insurance companies and ILS managers that have developed the data and technology to quantify and price such risks. What are the main challenges you see ahead? The sluggish economy and a prolonged period of low interest rate and low risk premium in not only re/insurance but across most asset classes. Are there any other leaders you particularly admire for what they have done to help propel Bermuda to prominence as a risk transfer hub? I am very fortunate to have been one of the first employees of Validus. Under the leadership of Ed Noonan, Validus has executed a strategy designed to create ‘first mover’ advantages. Examples include (1) the purchase of Talbot in 2007 gave us a platform to achieve substantial diversification and profit growth; and (2) the formation/incubation of AlphaCat in 2008 created one of the most successful reinsurer-affiliated ILS managers today. These leading companies have created a substantial amount of value for their shareholders and customers and contributed significantly to the success of Bermuda. They continue to play a key role in growing the prominence of Bermuda as a risk transfer hub. BERMUDA’S LEADERS PART II Lixin Zeng, PhD, CFA, is the chief executive officer of AlphaCat Managers and has played a key role since its formation. Prior to this role, he was responsible for developing and executing the catastrophe risk strategy of the entire Validus Group. Zeng was one of the original employees at the founding of Validus in 2005. Zeng has expertise in insurance portfolio optimisation and risk management and has published multiple articles in professional journals on related topics. He has a PhD in atmospheric sciences from the University of Washington where he graduated in 1996. He received a BS in meteorology from Beijing University in 1990 and is a CFA charterholder. Do you believe Bermuda will remain a risk transfer hub? The BMA has done a great job balancing the rigour of regulation and the flexibility enjoyed by the re/insurance companies based in Bermuda. The favourable tax environment enables re/insurers to accumulate capital and strengthen their balance sheet more quickly, making them more valuable to their customers, and the talent pool attracted to Bermuda serves as a cornerstone of innovation. How do you anticipate Bermuda will continue to adapt and evolve? These advantages, which made Bermuda a success in the “Lower-cost ILS capital has the potential to stimulate demand for re/insurance and narrow the coverage gap.” Lixin Zeng Job title: Chief executive officer Company: AlphaCat Managers Timeline: 2008: Joined AlphaCat Managers 2005: Executive risk officer, Validus Re 2004: Chief catastrophe risk officer, ACE Group 2001: Head of development, Willis Re 1998: Analyst, E. W. Blanch Co 1996: Research scientist, Arkwright Mutual Insurance 41 2016 Bermuda:Re/insurance+ILS


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