ILS Bermuda set to burnish Island’s alternative credentials

A new industry group, ILS Bermuda, aims to draw together leading Bermuda participants in the ILS and alternative reinsurance space in order to engage with the global capital markets, promote job creation and lead economic growth.

ILS Bermuda will also be hosting a gathering for the convergence industry on Thursday November 14 in Hamilton, which will be the group’s “ inaugural global insurance-linked securities networking event...[bringing] together the industry’s thought leaders, investors, sponsors and advisors.” For further detail on the event, click here.

Bermuda:Re spoke with Kathleen Faries, CEO of Tokio Solution Management and spokesperson for the new group about its remit and significance to the Bermuda re/insurance industry.

What is the remit and membership of ILS Bermuda and how do you see this developing?

The current “members” are really the committee members that came together to promote Bermuda as the premier domicile for reinsurance as an alternative non-correlating asset class, which includes insurance/reinsurance linked securities as well as the general collateralised reinsurance market. This ILS Bermuda event committee grew out of a strategic initiative that included organisations across the audit, legal, reinsurance and fund management professions interested and committed to building and sustaining the growth and opportunities in this space for Bermuda.

Over time more Bermuda-based organisations will be asked to participate in this initiative and specifically in the ILS Bermuda/Convergence 2013 event.  We want to make it clear that the committee is simply volunteering their time to make the November 14th event something that will become an important and critical event for participants in the space.  This event is about Bermuda, not the members of the initiative or the event committee.

How significant will government and regulatory support be in helping to develop the Island's ILS capabilities?

Both the Economic Development Minister the Hon. Dr. Grant Gibbons and the Bermuda Business Development Corporation (a newly formed public-private partnership designed to promote and sustain business in Bermuda) have both formally announced their support for ILS Bermuda and Convergence 2013. In short Bermuda is behind the event. We are ready to solidify our standing in the market as the leading jurisdiction in the ILS and collateralised reinsurance space.

What sets Bermuda apart from the global competition in terms of blazing a trail in the ILS space?

Bermuda is already an important jurisdiction for reinsurance. We also have worked hard to build an environment that works well for sidecars, catastrophe bonds and collateralised reinsurance transformation by creating an effective regulatory, legal, and management framework within the market.  There is no other place where you have the convergence of all of this market intelligence and expertise in one place.

We are leading the way when it comes to special purpose insurers and their use for both cat bonds and other collateralised transactions by sophisticated participants. The number of listings on the BSX has grown substantially over the last 12 months and will continue to grow. We have had many dedicated ILS fund managers setting up offices in Bermuda to be close to the reinsurance market and to take advantage of the expertise and market knowledge we offer in Bermuda.

Commenting on the formation of ILS Bermuda, Jeremy Cox CEO of the Bermuda Monetary Authority added: “The BMA's SPI classification of 2009 falls into our proportionate regulatory regime and Bermuda's track record of SPI incorporations since then is testament to a natural synergy between appropriate regulation and the business imperatives of the convergence marketplace. The BMA is supportive of the efforts of ILS Bermuda as it highlights Bermuda as the natural domicile choice to transact insurance-linked deals.“