Convergence: Pioneering researcher Kerry Emanuel heads list of speakers

Convergence 2024, the annual conference of Bermuda’s insurance-linked securities industry, starts in earnest today at the Hamilton Princess and Beach Club. 

The two-day conference features a range of panels and speakers who will delve into the burgeoning sector, which could see dedicated capital increase to a record $110 billion this year.  

Among the speakers at this year’s Convergence are Massachusetts Institute of Technology professor Kerry Emanuel, who will explore the evolving relationship between climate change and extreme weather patterns, drawing on his pioneering research in hurricane physics and the importance of advancing meteorological prediction methods to better understand and mitigate future risks.

Other speakers include Karen Clark, co-founder & CEO, Karen Clark & Company, who pioneered catastrophe modelling and is a on a panel entitled “Harnessing the Science: Perspectives from Industry”. 

Behavioural scientist Paul Craven will deliver a keynote speech on the role of the Role of Behavioral Science on Human-Decision Making and will then join a panel discussing “Behavioural Science Insights into Loss Aversion & Other Biases”, which will explore the impact of cognitive biases on investment decisions in the ILS and reinsurance markets. 

“While extensive research and analytics guide these sectors, human factors like fear, herd behaviour, and loss aversion still influence decision-making, and this discussion will address how well the industry is mitigating these biases, where improvements can be made, and how technology such as AI may help or hinder progress,” the conference agenda said. 

Other members of the panel, which is moderated by Rich Prior, Senior Vice President, Strategic Change, RenaissanceRe, include: Andrew Engler, CEO Kettle Re; David Flandro, Head of Industry Analysis and Strategic Advisory, Howden Re; and Tim Tetlow, Principal, Heliosphan. 

The final keynote address on day 1 of the conference is “The Natural Catastrophe ILS Market & Its Analysis”, delivered by Dr. Morton Lane, owner & president, Lane Financial. 

On Wednesday, the conference will look at how the sector is diversifying, with a session exploring  emerging risks and opportunities within specialty insurance sectors, focusing on marine, energy, and legacy markets. 

Panellists include moderator Darren Redhead, Shireen Gammoh, Managing Director – Legacy and Structured Solutions, Howden Re; Alexander Kirkby, Senior Vice President, Head of Marine and Energy, Ascot Bermuda; and Miles Staples, Head of Specialty - Senior Vice President, Vantage Risk.

That session will be followed by an always popular investor perspective from a panel on “Capital Dynamics in ILS: Understanding Efficiencies through the Investor Lens” which will be moderated by Michael Hamer, partner & senior analyst, Albourne Partners; Matt Ball, Managing Director, WTW; Chantal Berendsen, Partner & Senior HF IDD Analyst - Insurance, Albourne; Dominik Hagedorn, Co-Founder, Tangency Capital; Youssef Sfaif, President & COO, Mt. Logan Capital Management; and David Third, Senior Director, Head of ILS - Americas, WTW.

Perhaps the highlight of the morning session will be a CEO panel with Chris McKeown, chief executive - reinsurance, ILS, and innovation, Vantage Risk Companies and Mark Wheeler, co-founder & co-chief executive officer, Mosaic Insurance. It will be moderated by Richard Lowther, co-founder & managing partner, Integral ILS. 

 “This powerhouse panel of re/insurance leaders will discuss how they are navigating global economic shifts such as inflation, climate change, and geopolitical risks in a rapidly evolving marketplace, exploring how these macroeconomic factors are shaping strategic decisions related underwriting, capital allocation, risk management and innovation,” the agenda said. 

The afternoon session on Wednesday is a joint session hosted by ILS Bermuda and the Bermuda Institute for Ocean Science (BIOS). (See related story). 

The conference comes as the ILS sector has seen record growth. 

“The ILS market has benefited from a large investor base and the existing reinsurance expertise in Bermuda, which hosts one of the world’s largest insurance and reinsurance markets with over 1,400 firms,” conference organisers said. 

“Bermuda’s reputation as a premier insurance and reinsurance hub is well-deserved. As market disruptors create fresh opportunities, Bermuda’s role as an incubator for cutting-edge strategies becomes even more crucial. The island’s ecosystem is perfectly poised to leverage these  opportunities, ensuring it remains a central player in the global risk transfer landscape, and a leader in climate risk transfer solutions.

“2024 is on track to break another record in terms of primary catastrophe bond issuances. In the first-half of 2024, catastrophe bond issuance saw record growth and the Bermuda Stock Exchange (BSX) maintaining its dominant position in the listing of catastrophe bonds and ILS, with a total value of all ILS securities on the exchange rising to $59.74 billion by the end of June 2024. 

“Around 90% of the global catastrophe bond market’s issuance is listed on the BSX, representing 815 listings during the same period. At the time of this article, total issuance for the year stands at $13 billion, as reported by Artemis.

“The ILS market’s supply of capital could grow by as much as 10% in 2024, reaching an estimated total of between $105 billion and $110 billion, estimated by AM Best and Guy Carpenter. Reports further detail segments within the ILS market, including sidecar capacity estimated between $6 billion and $8 billion with larger deals and broader risks covered. Industry loss warranty (ILW) capacity is estimated to be between $5 billion and $7 billion, and collateralized reinsurance capacity at approximately $46  billion to $50 billion. 

“AM Best reported a trend towards more nimble capital deployment in ILS as something that has been increasingly featured in the market over the last few years.

Greg Wojciechowski CEO, BSX, said: “The Bermuda Stock Exchange (BSX) is proud to sponsor the ILS Convergence Conference once again this year. Since the mid-2000’s Bermuda has been recognized as the jurisdiction of choice for ILS and the BSX continues to be the world’s leading exchange for these innovative financial instruments.  

“Today we have 823 ILS listed securities and $42.5 billion in market capital outstanding as of 31 August 2024 representing 90% of the global cat bond issuance. Our robust commercial platform, backed by world-class infrastructure and an internationally recognised regulatory framework, ensures that Bermuda at the forefront of the ILS market for many years to come.” 

Brad Adderley, managing partner, Appleby, Bermuda, said: ““Bermuda continues to be the leading global domicile for ILS, with a sophisticated legal system, enhanced regulatory framework, developed infrastructure and an international reputation as a world-class financial centre. As a sponsor of ILS Convergence since its inception, Appleby is delighted to once again support this important  event.”

Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.