Bermuda offers comfort in face of uncertainty: Benchimol
As the moderator of a discussion at the Bermuda Risk Summit, titled ‘The Bermuda Angle: Global CEO market view and strategic lens’, John Huff, CEO of the Association of Bermuda Insurers & Reinsurers (ABIR), began by presenting the scale of the industry’s importance.
Using data compiled by the Bermuda Monetary Authority, he said that, since 1997, about $0.5 trillion had been paid to US, UK and European Union policyholders and cedants for large catastrophes, property and casualty losses and life insurance claims.
Albert Benchimol, President & CEO of Axis, said the timing of the summit was perfect.
“There probably wouldn’t have been a better time had you planned it for a conference like this one because when you think about what’s happening in the world right now, we have to agree that the world – and by definition insurance and reinsurance – is in transition. These last five years have been really challenging – increased frequency of weather-related cats, Covid, social inflation, financial inflation, uncertainty of the war in Ukraine, cyber-attacks,” he said.
“A lot of people that I speak to are just tired of it all and they’re anxious because of the uncertainty. And that brings us back to where we are today because what we do is to provide some level of comfort and confidence in the face of uncertainty because of the support we provide our customers across the world. It’s at times like this, that Bermuda shines and it’s not the first time.”
Arguing that the Bermudian re/insurance industry had been around for no fewer than 40 years – starting with the beginning of the excess casualty market in 1984 – he said the industry has provided lots of coverage that “no one else wanted to touch”, such as terrorism.
“And we’re going to continue to do that again. How do we address these problems? I’m actually optimistic because Bermuda shows that, we may be 62,000 people, we may be 20 square miles, but we are a third of the world’s reinsurance industry.”
Stephen Catlin, chairman & CEO of Convex, noted that 2022 is his 49th year in the industry, which gave him a long view of developments.
“The thing about London and Bermuda is that they are marketplaces. There are plenty of carriers around the world and of all sorts of shapes and sizes, but the two marketplaces, really, are Bermuda and London. Something you may not know, but Bermuda doesn’t just support Bermuda; it supports Lloyd’s because over 40% of Lloyd’s business comes from Bermuda.
“They share the same challenges. One of biggest challenges we’ve got right now, aside from the war in Ukraine, which is horrific, is understanding better and coping with systemic risk. One good thing about Covid is that the world now understands systemic risk. And that’s not the only causation. The next causation is definitely cyber. Neither of these two losses are losses the industry can cope with.
“We don’t have anything like the capital to deal with the losses and we never will. What we can do though is work with governments to mitigate the losses. The thing the pandemic has shown is that, when there is a systemic loss, governments around the world step in because they are ultimately the last port of call. Our job as insurers is to help them mitigate their position.”