Investing in the future of the legacy market
The outlook for the Bermuda legacy market is bright, says Sarah Ruberry, IRLA Bermuda Committee chair.
Earlier this year, the Insurance & Reinsurance Legacy Association (IRLA) launched its new Bermuda branch. I am delighted to chair this branch, which utilises the knowledge and services of an experienced UK-based international legacy association to encourage business connections, provide access to professional training and mentoring, and ongoing collaboration with respective regulators on behalf of market members.
The new branch was set up to strengthen the Bermuda legacy market, which had over $30 billion of P&C insurance liabilities under management at the end of last year. As a major re/insurance hub,
Bermuda already possesses many strengths including a sophisticated regulatory framework that fosters innovation and flexibility; deep pools of expertise; a well-established infrastructure; and a strong track record of financial performance and stability.
I’m extremely grateful and excited to work with a group of highly experienced people from across the legacy market to lead our Bermuda branch including representatives from RiverStone, Compre, BMS and Enstar.
A link in the chain
The launch of IRLA Bermuda highlights the growth opportunities in the Bermuda legacy market, which has become an increasingly attractive place for international businesses and a key link in the chain delivering capital solutions to the wider re/insurance industry.
The legacy market has evolved to be a mainstay of the industry and while the wider market has experienced recent challenges, including increased competition, the value proposition remains strong and the market outlook is bright.
The 2024 PwC Global Insurance Run-off Survey reported that the estimate for global non-life run off reserves exceeded $1 trillion for the first time (based on 2022 year-end data). So far this year there have been eight publicly disclosed transactions. One key focus will be to work closely with the Bermuda Monetary Authority (BMA) to build on the local market’s existing strengths and to increase its competitiveness.
There were some significant recent successes within the Bermuda legacy market during the first half of 2024:
• In March, S&P Global Ratings assigned an Insurer Financial Strength Rating of ‘A’ with stable outlook to Enstar’s Bermuda-based, wholly owned subsidiary, Cavello Bay Reinsurance.
Recognising the resilience of Cavello Bay’s business model, the new rating brings confidence and additional flexibility to the Bermuda market as it seeks to structure legacy transactions in the future.
• In June, RiverStone International received regulatory approval to acquire EIC, marking a significant milestone in its North American expansion. This major acquisition occurred just over two years after the successful establishment of its Bermuda operations.
• Also in June, Compre reported full-year 2023 results which were the strongest in the company’s 30-year history, with gross insurance reserves under management growing by 112 percent during the year after the completion of five transactions.
The new IRLA Bermuda branch will support IRLA’s international initiatives and events. In May, we hosted a Bermuda-specific panel session at the annual IRLA Congress, where our panellists—including Mark Allitt from Teneo; James Ferris from BMS; Jamie Saunders from RiverStone; and Gerald Gakundi from the BMA—profiled Bermuda’s leading position in the international legacy market, and the prominent role it now plays.
Following the successful launch of IRLA’s Future Leaders Programme, we are in the process of including several Bermudian professionals in the second iteration further demonstrating IRLA’s commitment to investing in the future of the legacy market and supporting strengthening of the talent pool.
We are meeting regularly with the BMA and re/insurers to ensure we are able to react and respond to regulatory or legal changes quickly and efficiently, an example being the Bermuda branch’s response in providing market feedback to the BMA on the recent Corporate Liability guidance. We will continue to work closely with the BMA to uphold Bermuda’s strong regulatory framework.
The Bermuda branch of IRLA is still in its infancy but we have ambitious plans for the future and look forward to building on the great foundations that have already been laid by IRLA. I welcome new members to the branch as well as any feedback or ideas from the market about future initiatives and partnerships that will help us to achieve our goals.
Sarah Ruberry is chair of the IRLA Bermuda Committee and chief compliance officer of Enstar Group. To find out more about the Insurance & Reinsurance Legacy Association visit irla-international.com
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