Challenging trends, challenging times

31-07-2017

Challenging trends, challenging times

Kathleen Faries is the head of Bermuda for Tokio Millennium Re and also one of the most vocal voices for the re/insurance industry on the Island. She talks with Bermuda:Re+ILS about recent developments in the market and what still needs to be done to promote diversity.

Kathleen Faries became head of Bermuda of Tokio Millennium Re (TMR) at the beginning of 2016, after joining the company in 2007. Prior to this she was CEO of Tokio Solution Management. She led the start-up of Tokio Solution and TMR owned Shima Re.

She is also the chair of the Tokio Solution Management board and a member of the board of Shima Re and has more than 25 years of experience in the re/insurance field including broking in the US, London and Bermuda markets as well as developing and managing captive insurance companies.

We also spoke to Faries in the context of her being one of the original ‘Women in Hamilton’ when we first published this feature in 2015. She remains one of the leading female executives on the
Island, driving forward an important player and regularly offering thought leadership.

Asked what has 2017 been like so far for TMR as a whole and specifically TMR on Bermuda, Faries is extremely positive.

“In Bermuda specifically we are starting to see our hard work
pay off,” she says. “Utilising capital markets solutions for the benefit of TMR and its third party capital partners is core to our corporate strategy.

“We have invested a great deal into technology to develop a platform for use with our capital markets partners. The platform is web-based, which is a much more efficient way to transact with our partners. By using this platform, we are able more efficiently and cost-effectively to scale up business, allowing us to focus on developing intellectual capital, products and solutions.”

Managing tricky conditions

Looking at the overall reinsurance market, Faries admits that it remains challenging. She points out that there’s a lot of capacity and capital in the market at the moment so margins were reduced again this year, continuing the soft market.

“This environment definitely provoked a lot of diligent reflection and good discussions at TMR on how best to optimise our portfolio and focus on the opportunities that exist in the market,” she says.

Market trends have always influenced the thinking of key executives.

“Technological trends are one potential disruptor for the market,” says Faries. “However, we have an advantage at TMR: we are a small reinsurer with excellent financial backing by the Tokio Marine Group. We are constantly looking at emerging technology and seeking new ways to access these new technologies. In other words we work at being tech-nimble.”

Faries points out that the global ransomware cyber attack in May had an impact on the market in that companies are now viewing cyber risk as an opportunity. More tools are being built, such as vendor models, which allow for analysis of cyber risks and other areas of the market.

As a consequence of recent events such as the cyber attacks people are becoming more aware of the risks and the best way of dealing with them. According to Faries the stakes have become very high for companies.

The Bermuda picture

“How does TMR view Bermuda at the moment in terms of business potential? TMR is in a unique place,” says Faries.

“We are a global company domiciled in Switzerland,” she points out. “The Bermuda office, a branch of the Swiss company, writes significant business in Bermuda, utilising third party capital as a core pillar of the firm. Bermuda remains an important part of TMR’s overall strategy, with the majority of our property catastrophe business being underwritten out of Bermuda. We are however a global company with global clients and a global focus.”

TMR is not the only organisation Faries is involved with. This year she stepped down from the board of the Women in Reinsurance group (WiRe), which strives to raise the profile—and the number—of women in the market on the Island.

She stresses that she remains extremely supportive of WiRe. “I stepped down so that I could work more with the Bermuda Insurance Institute (BII), which has also done a great deal for the industry in Bermuda.

“The number of women in the reinsurance industry in Bermuda is pretty high, but not in C-suites, senior management or boards of directors. According to the London Market Group just 5 percent of executive directors there are women, and that is consistent with the statistics I have seen in C-suites in the US,” she says.

“In the US financial sector, 50 percent of middle management are female, but then that percentage drops down to 6 or 7 percent in C-suites and other executive-level areas. My guess is that Bermuda would have similar stats.

“There are complex reasons for this disparity, but the number of women at C-suite level is not representative of the proportion of women in the workplace as a whole. This is a complex issue but it’s one that has to be addressed as the industry goes forward.”

On diversity, something that Faries is also extremely vocal about, she says it is important for the re/insurance industry to look at what might lie ahead over the next five to 10 years and where there is the potential for a great deal of change.

“We need diversity across age groups, cultures, experience and gender,” she says. “The influence of technology is substantial and growing by the day. Companies therefore need to address change as much as possible, because the industry as a whole is still viewed as one that is not very diverse and slow to evolve.

“The world is changing and so should we. We need more technology-savvy people, more flexible people and more people with different perspectives to deal successfully with the change that’s taking place in the market. 

“Companies need to be as agile as possible—adapting and evolving so we are not left behind,” she concludes.

Kathleen, Faries, Tokio, Millennium, Bermuda, re/insurance, cyber, management, women

Bermuda Re