Bermuda’s Convergence 2013 event, which will take place on 13 and 14 November, reflects growing interest in the potential of convergence capital to change the reinsurance landscape.
Convergence 2013 will be a unique networking event, bringing together leading figures from the global ILS market and is likely to be a major boon to the Island’s burgeoning ILS sector. Jason Carne, managing director and head of ILS at KPMG in Bermuda said he is optimistic that the event will increase the amount of ILS business driven in Bermuda.
“There has been a substantial growth in recent years and levels of capital have also reached a critical mass, such that ILS is here to stay and expected to grow”, said Carne. “There is significant interest in the investor community in the space. We are at a stage when the buyers of protection are comfortable with the price and type of coverage available as well as ancillary costs of transaction.”
Paul Schultz, CEO of Aon Benfield Securities, added that “given the significant capital inflows and growth in the ILS sector this year, Convergence 2013 will play host to interesting discussions that will help shape the outlook of capital markets solutions.”
Brad Adderley, insurance partner at Appleby in Bermuda, added: “This event will provide a niche platform where solid business opportunities can be discussed and conducted with all relevant parties in one place. It’s sure to provide existing players, and those exploring potential opportunities for the first time, an edge on what’s next for this increasing and in-demand asset class.
The Bermuda government has also lent its support to Convergence 2013, and the minister for economic development, Grant Gibbons believes the event will cement the Island’s place as at the forefront of developments in ILS.
“Bermuda has traditionally been at the forefront of new trends in the risk industry, and this event will provide further opportunity to allow Bermuda to demonstrate its expertise and global presence in the sector and the distinct advantages to facilitating business here”, said Gibbons.
“This event will help to enhance our reputation as the world’s risk innovation capital. We in the ministry of economic development and the entire government are focused on reviving our economy, attracting foreign investment and creating jobs. Through this public/private partnership we are confident we can continue to bring new business to Bermuda.”
The groundwork was laid for Bermuda’s plans to become the jurisdiction of choice for ILS in 2008 when the Bermuda Monetary Authority (BMA) introduced legislation for the establishment of special purpose insurers (SPIs), which helped streamline the process for the incorporation of ILS.
Interest in alternative forms of reinsurance capital grew rapidly, and by July 2010, the Bermuda Stock Exchange had reached its first major milestone when cat bond listings pushed through the $1 billion barrier for the first time. By 2011, listings had passed the $3 billion mark, with $5 billion of issuance reached in September last year. Fast forward to June this year, and that figure had surged beyond $7 billion. Listings have increased by 60 percent this year alone, and they currently stand at $8.5 billion.
The surge of alternative capital into the reinsurance markets shows no sign of slowing. Reinsurance broker Guy Carpenter reported in September that $10 billion of new capital has entered the market in the past 18 months in the form of catastrophe bonds, structured industry loss warranties and collateralised reinsurance and it estimates that alternative reinsurance now accounts for 14 percent of property casualty reinsurance purchased globally.
The timing, therefore, could not be better for Convergence 2013, which will undoubtedly help to lead the discussion regarding where exactly alternative reinsurance is heading.
For more information on Convergence 2013, visit http://ilsbermuda.com/convergence-2013/
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