As the re/insurance industry deals with everything from hurricanes to Brexit, leadership has never been more important. Bermuda:Re+ILS takes a look at the people who are providing Bermuda with the leadership that circumstances now demand.
Leadership has always had a somewhat elusive quality when it comes to trying to describe it. In the world of the military it shows up in a wide range of circumstances, ranging from hard and fast decisions made on the fly to the more direct example of leading a charge straight at the enemy.
For the business world matters are more nebulous. A word in the right ear here, a quiet decision there, a meeting called at the right moment or coming up with an idea at just the right time—these are all examples of what leadership is based upon.
For Bermuda leaders are vitally important. The Island is the fraction of the size of London or New York, with a fraction of the population. Business decisions made on Bermuda matter to Bermuda—and must be made carefully.
Leadership is therefore an important quality here, one that matters. In the wake of the 2005 hurricane season company after company was founded on Bermuda as businesses took advantage of the hard market. Recent years have seen their numbers drop due to mergers and acquisitions. This has changed the nature of the market in many ways, not least being the fact that leading executives have to factor in the possibility of being taken over—or of course taking someone else over.
With new technology impacting the market in all kinds of ways, from insurtech to the complex issues surrounding driverless cars, mental agility is now a must. Leaders need to take into account a greater amount of information about a wider range of topics than they might have before—and they need to stay up to date.
As a result, the industry will require a new set of leaders to embrace these fundamental changes and use them to their advantage. This is the core basis of this special report by Bermuda:Re+ILS. We asked our in-house editorial teams and the many experts and advisers we speak to daily to help us identify those individuals within reinsurers who will help change take place—for the betterment of the industry they work in and for society as a whole.
Their biographies and thoughts on the industry are featured on the coming pages. It is important to stress that this cannot be a definitive list, but these are the names that came up most during our informal inquiries.
Our quest also focused on individuals who will mould the industry going forward—as opposed to having shaped it in the past. All these individuals are from reinsurers—separate lists of influential service providers and insurance-linked securities (ILS) and funds experts will be published in the November issue.
Looking at some of the responses from the leaders that we have identified, some common trends emerge. Insurtech is one such topic of conversation. Jed Rhoads, president and chief underwriting officer of Markel Re, says that the rapid rise of interest in insurtech stems from a need to deliver insurance products more quickly, more cheaply, and better.
“There will likely be a natural progression of attack first on simpler products such as personal lines and then moving on to smaller commercial lines,” says Rhoads.
“More complex products such as large and industrial commercial risks and reinsurance will also become targets, but by their very nature this will take more time and look a little different.
“Bermuda-based entities have a history of pioneering new and better products and the capital and creativity to be at the forefront of this type of innovation. I don’t see any reason for this not to continue.
“Markel Corporation is headquartered in Richmond, Virginia, with operations in Bermuda, and we are highly focused on and investing in insurtech in all locations given our business composition.”
Peter Kiernan, president and chief underwriting officer of AXIS Re Bermuda, agrees about the importance of insurtech. He says: “To stay relevant in our ever-changing industry reinsurers must embrace new technologies that will enhance distribution, data and analytics, and risk selection.
“The Bermuda market must stay open-minded to changing or supplementing our business models by partnering and potentially investing in the technology firms reshaping our industry. AXIS has partnered with Silicon Valley tech accelerator Plug and Play in this capacity.”
Another issue that most mentioned was the one that has been dominating headlines all over the world—the 2017 hurricane season. PartnerRe’s executive vice president, head of global cat and head of property North America P&C, Greg Haft, points out that Bermuda continues to be the pre-eminent home for cat reinsurance.
“I fully expect that to be true regardless of the magnitude of future events. There will be changes after the ‘big one’ hits, but I would expect Bermuda reinsurers to step up with increased capacity to help our insurance partners continue to support their customers.
“As a financially strong, privately held company, PartnerRe will certainly do so. There may be some startups, but I believe most of the additional capacity will be through sidecars and other forms of bolt-on capacity.”
Kathleen Faries, head of Bermuda at Tokio Millennium Re’s Bermuda branch, says that if history repeats itself, the Bermuda market will show that it knows how to deliver on its commitments and to trade through big events. What that will ultimately look like is not certain.
“What is certain is that Bermuda has led the industry on infrastructure and regulation that enables capital to be deployed efficiently when there is a need—we have seen this play out in Bermuda time and again over the years,” Faries says.
“With more of this capacity being collateralised, Bermuda’s regulator should continue to responsibly enable innovative structures that facilitate efficient matching of capital to risk.
“Likewise, after a large event, surely there must be a way to harness technology and infrastructure to settle collateral requirements for loss-impacted contracts in a more transparent and automated fashion, using AI and blockchain for all parties.
“In my view, this is the thought leadership and innovation that Bermuda markets could and should drive.”
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