SECURING


COMMONSENSE REGULATION


T 20 Bermuda Finance | 2014


he dominance of Bermuda as the home of alternative capital providers and insurance-linked securities (ILS) funds taking on insurance risk has further demonstrated the innovation and synergy at work here in the middle of the Atlantic.


This doesn’t mean some tears aren’t being shed. It’s always tough when you see your margins being eroded because of the work of new competitors, particularly when their stated goal is a return on equity half of what your investors want. Pension funds are eager for yields at 8 percent from a non-correlating asset class, such as re/insurance risk. But as XL Group CEO Mike McGavick has said publicly several times, he’d rather work in an industry which attracts capital than one that doesn’t.


For ABIR members as a group that seems to be the case. ABIR members sponsor sidecars, invest in ILS, retrocede to collateralised reinsurers and invest in pioneering vehicles that will allow asset providers to take liability insurance and reinsurance risk directly.


Topics dominating ABIR member conversations from the boardroom to the golf course include putting new capital to work and managing regulatory compliance challenges, and in leading global insurer and reinsurer forums around the world the same is true, says Brad Kading.


Growing markets


The challenge, and the opportunity, for insurance companies now is to grow their markets. With the assistance of policymakers, there are three ways to do this:


Grow markets by increasing insurance enetration in deeloed markets


The take-up rate for residential earthquake shake damage in California is estimated to be less than 10 percent. Several states took action this year on legislation encouraging private sector insurers to write fl ood


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