Bermuda Roundtable 2019

Bermuda has certainly been a hotspot of activity in recent years, with the island bearing witness to numerous mergers and acquisitions, start-ups and closures.

The island remains a destination of choice for many looking to establish new (re)insurance businesses, while it continues to be the pre-eminent domicile for both captives and the
ILS industry.

That it remains such a hotspot for the ILS market, even when faced with aggressive competition in the wake of newly minted rules and legislation in jurisdictions such as the UK and Singapore, is testament to Bermuda’s regulator as well as those on the island who are widely regarded as innovators and pioneers.

At the same time, Bermuda continues to be the go-to destination for property catastrophe business, and it has enjoyed even more success due to the difficulties and shifts taking place in other (re)insurance markets in the world such as Lloyd’s and the US.

These topics are just some of the points of discussion that came up during a roundtable that The Insurance Insider hosted in partnership with Lloyd’s Bank in Bermuda at the start of November.

Other topics that came up included the dislocation that has occurred in the wholesale market between client expectations and carrier’s aspirations.

With risk managers struggling to take on board the reversal in pricing as a hardening market gathers pace, brokers are under the cosh to both sell rate increases and continue to articulate the value of the reinsurance product.

Meanwhile, in the ILS market, trapped capital – or ‘trapital’ as it is fast becoming known – is a continuing issue, while loss creep from 2018 events continues to concern existing and prospective investors in the space.

But of equal concern to the industry currently is the growing crisis in the casualty market, with social inflation threatening to overwhelm carriers who haven’t sufficiently reserved for the rising tide of claims.

That said, it’s not doom and gloom for every sector of the market. The legacy segment has a huge opportunity, with continuing remediation in Lloyd’s and re-underwriting of portfolios in the company market.

As Premia’s Scott Maries notes: “Outside Lloyd’s we’ve only seen the tip of the iceberg in the US.”

Elsewhere, as reinsurers contend with rising retro prices alongside the above challenges, the industry as a whole is seeking ways to make conducting business more efficient.

For some this implies withdrawing capacity from volatile business and diversifying into areas with better returns.

For others it involves divesting themselves of entire segments in order to concentrate on core business. And the issue of which technological innovations are likely to improve underwriting and distribution models is as keenly debated as ever.

Read on to discover what is exercising participants in the Bermuda market and get a glimpse of what may befall the industry in the year ahead.

To view the Bermuda Roundtable 2019 supplement, please click here.

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