Big shoes to fill

29-03-2018

Big shoes to fill

Brad Kading is widely acknowledged as having taken the profile of the Association of Bermuda Insurers and Reinsurers to another level during his 12 years at its helm. His successor John Huff describes to Bermuda:Re+ILS his plans for the role and why Bermuda should be bullish about its future.

At the close of 2017 Bermuda witnessed the end of an era, when re/insurance industry veteran Brad Kading stepped down from the position of president and chief executive of the Association of Bermuda Insurers and Reinsurers (ABIR)—a role he held for 12 years.

Kading left the body in good shape and his work was universally praised when he stepped down. He is credited with helping to build ABIR into a powerful advocate for its members.

Kevin O’Donnell, president and CEO of RenaissanceRe and the ABIR chair, praised Kading’s work. “He has helped us navigate through a number of political and regulatory challenges around the world,” O’Donnell said. “We are grateful for his many contributions to the advancement of our organisation and industry and wish him all the best as he begins this new chapter.”

Carrying the baton on

Big shoes to fill perhaps, but the ABIR seems to have found a candidate on a par with Kading.

Into his place stepped John Huff, whose resume includes past stints as the president of the National Association of Insurance Commissioners (NAIC) and the former director of the Missouri Department of Insurance, making him a more than suitable replacement.

Huff says he understands the legacy Kading has left and is keen to pick up the baton in a seamless manner from his predecessor. He knows that continuity is vital in what is going to be an important year for ABIR.

“The number one priority is to continue the work that has been started,” he says. “This year we are commemorating the 25th anniversary of the ABIR’s being the collective voice on public policy, education and advocacy for the Bermuda market, which is one of the leading re/insurance markets in the world.”

Replacing Kading was especially attractive to Huff, as he acknowledges that the association has been left in a very good place.

“I’ve always been a big fan of ABIR—I was a state regulator for eight years, I was president of NAIC and even before that I was in the reinsurance industry for a major Swiss reinsurer. Throughout, I’ve been impressed with the Bermuda market—it’s an internationally respected regulatory regime and tremendous risk management talent and modelling have positioned Bermuda as a leading underwriting centre,” he says.

“Bermuda is one of the few markets designated a qualified jurisdiction by the US, and there’s a tremendous working relationship between the state regulators and the Bermuda Monetary Authority (BMA)—I worked on that relationship when I was at the leadership of the NAIC.

“There’s also the tremendous market position of being Solvency II-equivalent, so there’s a great deal of European business being written in the market. The Bermuda market leads in natural catastrophe reinsurance protection around the world.”

A solid pedigree

Huff served as president of the NAIC from January 2016 to January 2017, but his time at the organisation stretches back further. He was also a member of the US Financial Stability Oversight Council (2010–2014 appointment), chair of the NAIC Financial Regulation Standards & Accreditation Committee, chair of the NAIC Reinsurance Task Force, chair of the NAIC Governance Review Task Force and vice chair, NAIC/Industry Liaison Committee.

He also served on the NAIC Financial Stability Task Force and the NAIC International Insurance Relations Task Force.

It is important to Huff that ABIR continues to be the voice for open, transparent and fair insurance markets around the globe, educating on the value of risk diversification, and he will champion education on risk transfer and the industry generally.

“On education, we need to be not only explaining reinsurance and the concepts of reinsurance risk diversification but also identifying and warning policy leaders of some of the systemic risk dangers of protectionist measures,” he says.

Huff points out that protectionist measures can be in regulation, trade or tax—in the US or around the globe. There are some real concerns about protectionism and that’s an area Huff says he is particularly energised about to make sure that ABIR acts as a voice against those protectionist measures.

“Some of the major concerns about protectionist measures include trapping capital locally, which can lead to excessive or redundant capital that is trapped in a jurisdiction and can’t be used efficiently by companies,” he says.

He explains that the ABIR will counter, where possible, anything that imposes unnecessary burdens on markets, makes markets inefficient, hinders the efficient spreading of risk and creates an environment that fosters a concentration of risk. From a regulatory standpoint these things are very important, he says.

“It’s the basic principle of the law of large numbers and understanding that the diversification of risk is a good thing.

“There’s an overall theme of impeding healthy company growth. In terms of protectionist measures I don’t think any jurisdictions are immune from them, but it’s important that policymakers understand the risks that come with such measures.”

Innovative yet collaborative

According to Huff, one of the strengths of the Bermuda market is that it is very innovative and collaborative. Everyone works together and collaborates, but they also understand their independent roles.

As a result, he expects all aspects of Bermuda to be as engaged as they always have been. He particularly underlines the fact that ABIR has a very strong working relationship with the government and the Bermuda Business Development Authority, along with the Association of Bermuda International Companies, so there is a strong working relationship with the BMA.  

“We are very respectful of the BMA’s independent role and we understand they need to be properly resourced, which is a very important aspect,” Huff says.

“I come from being a regulator; some jurisdictions give their regulators a heavy load to carry when they don’t properly resource them. That’s an area where there should be a strong voice, making sure that the regulator has proper and strong resources and remains independent.

“Bermuda is a resilient market and also very adaptable when it comes to addressing the challenges out there. There are so many themes in the market these days, from insurtech to cybersecurity and some of the distribution challenges.

“February was Insurance Career Month on Bermuda and attracting talent is a significant competitive advantage for Bermuda. There is a tremendous amount of insurance human capital in the Bermuda market and perhaps that’s the most competitive advantage the Island has. We need to continue that course of developmental talent.”

Huff highlights the unique advantages that Bermuda has, joking that the Island is probably the only place in the world where schoolchildren know what an actuary does.

“Bermuda has a great mix of talent, something you can feel in every meeting you go into—a mix of global and local talent, and local talent that goes on to become global talent. It’s an underwriting centre that writes risk around the world,” he says.

“I’ve never known a market where the people are so aware of worldwide events and risks. My experience of Bermuda has been that people speak globally—and their businesses are global,” he concludes.

ABIR, NAIC, John Huff, Bermuda, president, replacement

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