The fact that world economic powerhouse China is now looking to Bermuda is an excellent reflection of the Island’s prominence in the financial sector, says Greg Wojciechowski, president and CEO of the Bermuda Stock Exchange.
Bermuda received a real boost when China Re selected the Island as the domicile of the Panda Re catastrophe bond, covering earthquake exposure.
While not the biggest issuance we have ever had, the $50 million of notes listed on the Bermuda Stock Exchange (BSX) marks the confidence that countries around the world have in doing business in Bermuda.
This is because we have demonstrated over the years that we operate in an innovative environment which has the essential critical mass in a variety of areas offering support to the wider financial services industry—not forgetting an old-fashioned willingness to give our clients the best value and treat all of them with great respect.
The high standard the Island maintains extends to the BSX. The fact that the BSX operates within the ‘World’s Risk Capital’ also creates a unique opportunity for us as a capital markets operator, one that the Chinese have recognised.
We are established as a premier international financial centre and an accepted model for start-ups, as well as being the world’s third largest reinsurance market. The aspiration is to do the same for the insurance-linked securities (ILS) sector, and we are off to a great start.
Bermuda had all the pieces in place due to its prominence and longevity in the sector to embrace and support the changes going on in the market, including ILS. In fact, given Bermuda’s existing infrastructure, expertise and longstanding reputation, it was the intuitive location for this asset class to evolve and flourish.
"ILS is just one example of Bermuda’s drive to innovate. Another is Bermuda’s commitment to re-energise its support for the global fund industry."
As the market began to change the way it sought capital, Bermuda’s firms and ancillary support services quickly noted the trend and adapted to meet the needs of this developing trend. The success of this adaptation is clearly evidenced by the deal flow attracted to Bermuda and the quality level of service (and the reputation of this service) for this highly specialised area of the industry.
There are more than 700 securities listed on the BSX, of which more than 300 are offshore funds and 141 are ILS.
Bermuda wants to blend the new capacity with the traditional in a manner that protects the overall integrity of the reinsurance product. We have done this by ensuring our infrastructures are strong and sound and our regulatory standards are fit for purpose—backed up by years of reinsurance experience and knowledge.
The thriving cottage industry that has developed around the ILS/alternative risk transfer asset class contributes directly to Bermuda being seen globally as the logical choice for the creation and servicing of ILS/alternative risk transfer transactions.
ILS is just one example of Bermuda’s drive to innovate. Another is Bermuda’s commitment to re-energise its support for the global fund industry, which is well underway at present. This can be seen at the BSX which is the listing home to more than 300 Bermuda and internationally based investment fund structures.
The Island has worked hard to create its reputation as a first class international financial centre in re/insurance that also supports a wide variety of other products. The fact that world economic powerhouse China is now looking to Bermuda is an excellent sign and we hope there is more to come from China and other geographic locations.
Bermuda Stock Exchange, Greg Wojciechowski, China Re, Panda Re, Bermuda, Asia-Pacific