22 July 2016ILS

Ahead of the curve

The main theme of this month’s publication is the burgeoning pool of female talent in Bermuda’s risk transfer sector—women directly working in reinsurance and broking, as well as those servicing this sector from within other types of professional firms.

The features examine the careers of 40 successful women (complementing a similar list we published 12 months ago), looking at their career paths so far and their future ambitions, while also asking whether they have ever experienced the so-called glass ceiling or any form of gender discrimination.

It was therefore natural to speak to one of Bermuda’s most influential female executives, to gauge her opinion on these issues, and to discuss her goals in a relatively recent role. Kiernan Bell, who became chair of the Bermuda Business Development Agency (BDA) in April, was previously managing partner of law firm Appleby (Bermuda) and continues to head its dispute resolution team.

“Solvency II equivalence is a huge vote of confidence and it means we can now stand up and prove we are different.”

Her position as BDA chair is particularly interesting, coming just three years after the agency was formed and at a critical point—when it is moving from start-up mode, in which it established strategic goals, to a phase of execution and ensuring its work has a direct positive impact on Bermuda’s economy.

Asked first about her perception of the changing opportunities for women in the industry, Bell says although she has experienced discrimination (and still does), she has generally turned that negative to her advantage.

“I have certainly not experienced any glass ceiling at my firm, but I have often been the only woman in the room and perhaps I have learned to prove myself in a different way,” she says. “I have had some quite funny experiences because my name is gender-neutral. I have dealt with people by correspondence who can be surprised when they meet me.

“But that often gives me an advantage in negotiations. On one occasion someone was very rude to me on the phone because they thought I was my secretary. Embarrassment can be a powerful negotiating tool.

“I have experienced sexism, but it has never held me back. I just carry on representing my clients to the best of my ability and my reaction to it has probably changed over time.

“I, along with many other women, have learned to view chauvinism as something that is not my problem. I do view it as a problem, but not one that belongs with me to fix.”

She also believes professional women can face unique challenges compared with their male counterparts, but these can be more easily overcome by being open and honest with colleagues and clients and trusting in their understanding and support.

Bell recalls a particularly tough period when she was working on a hostile takeover, her nanny was on holiday and her back-up child support became critically ill. She carried on juggling family life and work—once resorting to hiding in a closet to take a conference call with about 10 male NY lawyers.

“At the time I did not feel I could admit my logistical issues but when you are engaged in commercial litigation and also the sole child-carer, there is a limit to what you can manage. Ultimately all the participants in the call had to say hello to my child—which they did with grace and good nature—in fact for months afterwards she would race to answer the phone expecting the same chorus of voices,” she laughs.

“In retrospect, I think a man would have simply disclosed the problem in the first place, but I fell into the trap of bending over backwards to accommodate work and avoiding what I feared might be perceived as weakness,” she says.

“Since that time I have learned that life happens and, male or female, we should not apologise for it.”

In recent years in Bermuda, a number of women’s networking and mentoring groups have sprung up. Bell suggests this is partly because there are more female professionals, prompting increased understanding of networking’s importance, and partly because pioneers who have achieved relative seniority in the industry feel a responsibility to mentor those following in their path.

“Women are succeeding more in business and they feel a responsibility towards other women. I must also stress that men are not excluded from such groups and some of the most supportive peers and mentors in my career have been men. But that is the sentiment behind such groups being formed,” Bell says.

Boosting Bermuda’s economy

As chair of the BDA, Bell serves as the lead non-executive director of the body, with the potential to make a great difference to the Bermudian economy. She has been on the board of the BDA since it was formed in 2013, having previously served in a non-profit role as president of the Bermuda Bar Association.

She was keen to be involved with the BDA because its remit was very different from that of bodies that came before it, including Business Bermuda and the Insurance Development Council. The BDA takes a targeted, proactive approach to business development, rather than general marketing of the jurisdiction, and its clear mandate is to substantively contribute to the growth of Bermuda’s economy, fostering an environment that helps creates jobs.

While its formative years were necessarily focused on building infrastructure and a professional team, as well as setting goals, the BDA is now firmly in a period of proactive execution, she says.

The agency has four target sectors, or ‘pillars’: risk (reinsurance, insurance, captives and insurance-linked securities [ILS]); asset management; trust and private client (focusing on private wealth and family offices); and international commerce (industries such as shipping and aviation, as well as blue-sky sectors such as technology, fintech, biotech, etc).

Despite the focus on new ventures, however, the BDA acknowledges the importance of the Island’s long-time insurance and reinsurance sectors.

“These are key areas of focus for us,” she acknowledges, “and when you are seeking growth, it is natural to look at what you do well already—areas in which you have always been a market leader. Our focus is also naturally on more than traditional reinsurance. Bermuda now has 75 percent of the global capacity in the ILS sector.

“This area is of particular interest because it represents the convergence of reinsurance, asset management and institutional investors, offering Bermuda exposure to a whole new set of potential clients on the asset-management side who may not have dealt with Bermuda as a jurisdiction before. This represents a very good opportunity for us to speak to a whole new set of investors,” Bell says.

Bell praises the work of the Bermuda Stock Exchange (BSX), a full member of the World Federation of Exchanges that acts as a hub for ILS deals and listings.

Poised for success

As the nature of risk transfer continues to evolve and change, she is confident Bermuda will remain at the forefront of future developments and innovation. The root of this success, she says, has always come from the jurisdiction’s exceptional regulatory regime, known for being robust, yet flexible and commercial in its approach.

Such status has been recently underscored in the best way possible, with Bermuda securing Solvency II equivalence with Europe, one of only two countries to do so—the other being Switzerland. Bell regards this achievement as highly significant for the jurisdiction and one that will reap rewards for the Island for many years to come.

“We will see some benefits immediately as we are in a better competitive position now compared with many of our peers,” she says. “But it will also have a lasting legacy for Bermuda that will play out in the long term.”

The status is particularly helpful in the aftermath of a stronger global focus on regulatory issues, and reputational attacks after the ‘Panama Papers’—which cast a negative light on all offshore jurisdictions regardless of their nature. Bermuda did not appear in the Papers, yet the jurisdiction is often unfairly grouped with less scrupulous domiciles due to misinformed media or political reasons, Bell acknowledges.

“Solvency II equivalence is a huge vote of confidence and it means we can now stand up and prove we are different and should not be put in the same bucket as our rivals,” she says.

“It gives us a reputational advantage that should be beneficial, highlighting our international status as having a first-class regulator.”

The BDA was already big on the message that Bermuda stands apart from other jurisdictions. Bell notes a major part of its marketing message is what Bermuda gives to the world in economic contributions—through jobs created in onshore markets, as well as vast claims paid to communities by Bermuda-based re/insurers, rebuilding after the worst disasters such as 9/11 or the 2015 UK floods.

“We are a mature and well-regulated market and, as such, companies based here pay claims in a timely manner,” Bell says. “We are home to a sophisticated commercial insurance sector and that is no coincidence. It has developed on the back of our strong regulatory regime.

“We are a tax-neutral domicile with a blended tax rate of around 20 percent of GDP, which is quite different from some competitors and not that far off the US, but with a blue-chip reputation.”

One of the BDA’s big focuses at the moment is job creation. By actively encouraging growth in the risk transfer industry, the hope is that a growing economy will fuel a multiplier effect.

The country has been working in other ways to enhance Bermuda’s pool of intellectual capital. For example, the Island has established a programme with the Regulatory Compliance Association (RCA) to create scholarships related to the growing field of compliance in the financial services arena.

Rapidly changing international standards and different approaches to taxation are becoming global trends. Bermuda also needs to be aware of competition, both onshore and offshore, in an increasingly competitive market, Bell says.

“The fact is, we need to continue to stay relevant by providing innovative solutions. We are pretty well-placed to do it. Bermuda will position itself to compete, grow and win new business. We are already a hub for ILS and reinsurance, and this should evolve for many years to come.”

Bermuda has always been ahead of the curve, she points out.

“We embraced transparency before it was fashionable and we have been capturing details on beneficial ownership for decades—issues that only now are starting to make headline news.”

The BDA acknowledges the US is Bermuda’s biggest trading partner, so the agency is focused on remaining relevant to that market, Bell says. But it also sees more opportunities emerging to trade with Latin America, thanks to tax treaties—tax information exchange agreements (TIEAs)—with Colombia and Mexico, and Canada is another market where the BDA is focusing efforts to promote what Bermuda offers.

“We are also looking at how to increase the amount of business we get from Asia,” Bell says.

Thanks to world-class talent and a robust regulatory regime enhanced by Solvency II equivalence, the Island is well positioned to respond and benefit from the next change or cycle in the world of risk transfer, she believes.

“We are innovative and different and Bermuda provides a compelling case for risk transfer vehicles of all types to be headquartered here,” she says. “We will continue to be a centre of risk transfer excellence and we will remain agile and responsive to any new challenges.”