‘Bermuda is one of the best ILS platforms’

Bermuda has adapted to the changing world reinsurance climate and is competing against the other global leaders.

This from Jeremy Pinchin, CEO of Hiscox Re, who said the insurance/reinsurance market is normally counter-cyclical to the world economy.

“In 2008 onwards when the world was having its global recession, reinsurance and insurance was doing quite well. 

“As we see the world coming out of the recession, we’re seeing a soft market come into the industry. 

“A lot of that was caused by so much money looking for a home. They were concerned about equities and they weren’t getting the returns on the interest rates, so they came into reinsurance and that started to accentuate the soft market where we’ve had relatively soft conditions since 2011. 

Competing

“So things are getting tough, particularly in the reinsurance sector, which is a dominant part in Bermuda, where we are seeing a changing dynamic of insurance linked securities (ILS) and other forms of capital coming in and competing with traditional reinsurance.”

He said the reinsurance industry in Bermuda is having to adapt and evolve in these changing conditions and use the ILS model.

“The good thing for Bermuda is it is competing on both platforms. Bermuda… is proving to be one of the strongest insurance linked securities platforms in the world. It is keeping its traditional reinsurance and adding insurance links, which means that Bermuda is able to continue to compete and make sure it is a global leader in reinsurance.”

Mr Pinchin said the Bermuda-based companies that have made the move to the ILS market over the past few years have done well.

“Bermuda is still one of the most vibrant insurance markets in the world, particularly in reinsurance. London remains competitive but it doesn’t have some of the natural advantages of a low-tax regime as we have in Bermuda.”

He said Bermuda has a great pool of talent here.

“We are seeing places like Switzerland and Dublin coming into play, but none of them in any way that’s competing with the vibrancy of the Bermuda market, which is great for Bermuda.”

He said both the current and previous Government did their part to help make international business successful but it has also been helped by “the strong regulation by the BMA. That’s very important to Hiscox and other companies in Bermuda”. 

Appreciated

He said while “we’ve appreciated the support made recently by the Government” it is more important to “new entrants to Bermuda because it gives them confidence of stability in the island through the different Governments. 

“For us, we know it’s a great place to be and it’s a great place to hire staff and so we’re very happy participants and very happy to be domiciled in Bermuda.”