Sylvia Oliveira, chair, BILTIR
25 May 2022News

Life lessons: learnings from a decade of BILTIR in Bermuda

The life sector has been described as a new economic pillar for Bermuda. Would you agree?

Yes! The life sector has been a tremendous economic growth story for Bermuda in recent years and Bermuda International Long Term Insurers and Reinsurers (BILTIR) reflects this. When BILTIR started in 2011, we had five member companies, but that number has now grown to 66.

How has BILTIR been able to raise its profile with other organisations in Bermuda?

Over the past 10 years, BILTIR has worked side-by-side with other Bermuda associations including the Association of Bermuda International Companies (ABIC), the Association of Bermuda Insurers and Reinsurers (ABIR), and the Business Development Agency (BDA) to address opportunities and threats that might impact Bermuda’s international business sector.

Leading up to Solvency II equivalence, BILTIR and ABIR worked together on various working groups covering the Economic Balance Sheet, financial disclosures, home office requirements and other areas of commonality. BILTIR has also worked with ABIR and ABIC on various advocacy efforts, such as the US BEAT tax, Common Reporting Standard for taxes, Economic Substance requirements, anti-money laundering assessments, and the Organisation for Economic Co-operation and Development’s (OECD) global minimum tax.

BILTIR participated in jurisdictional campaigns of the BDA during New York and London conferences as well as at the Refocus Conference in March. The BDA’s long-term working group supports growth efforts of the Bermuda life sector. All the organisations work together to support the community, in particular supporting Bermuda’s schoolchildren. We are united by a common goal of Bermuda’s long-term viability and vitality as a thriving jurisdiction for international business.

“BILTIR’s strategic direction is built around four main pillars: local advocacy, international advocacy, learning and networking, and social impact.” Sylvia Oliveira, BILTIR

What progress has BILTIR made with lobbying the government and the regulator?

For the past 10 years, BILTIR has been a consistent and coherent voice for Bermuda’s life sector. Our work supports a vital part of the industry that provides secure and affordable protection to families and retirees across the globe. BILTIR’s strong advocacy for the sector has led to a robust stable regulatory environment in which life companies are able to conduct their business in a safe and prudent manner.

Life companies have an extremely long time-horizon, so the long-term stability and reliability of a jurisdiction is a vital factor for companies when deciding where they should be domiciled.

BILTIR worked closely with the Bermuda regulators and government during the period of major regulatory change leading up to the attainment of Solvency II equivalence in 2015. BILTIR continues to actively participate with the Bermuda Monetary Authority and the Bermuda government in relation to relevant pre-consultations, consultations, and discussions, covering any and all issues impacting our sector.

Our current lobbying efforts are focused on the OECD’s Pillar 2 global minimum tax.

What has the Bermuda life industry learned from its experience of the COVID-19 pandemic?

The pandemic was a test of resilience for the Bermuda life industry and the entire international business sector. A nearly seamless transition to working from home allowed companies to continue operating at highly productive levels. Bermuda life companies continued to transact throughout the pandemic, which was a real-life test working from home, and it is clear that remote working has not hampered productivity.

How has the Bermuda life industry been managing the macroeconomic challenges?

Interest rates have been a constant challenge for the life industry. Low interest rates and spreads make transactions difficult due to inflated market values and low reinvestment rates. High inflation also brings potential challenges with increasing inflation-linked benefits and rising expenses. Life companies must carefully monitor and manage exposures to rate volatility.

How are Bermuda life companies managing the requirement to calculate reserves under eight different interest rate scenarios?

The requirement to calculate reserves under eight interest rates shock scenarios has been in place for several years. This methodology captures any duration mismatch between assets and liabilities and ensures companies are holding adequate reserves to withstand a severe adverse change in future rates.

Life companies routinely conduct these types of analyses for internal asset liability management purposes, as well as for other jurisdictional and rating agency requirements. For example, this methodology is similar to the ‘New York 7’ scenario testing used for Asset Adequacy analysis in the US, and the Canadian Asset Liability Method used for the valuation of insurance contract liabilities.

Bermuda life companies are well equipped to be able to project and discount their liability flows under various rate shocks as part of their core functionality.

What initiatives have there been on data collection, aggregation and usage?

BILTIR’s executive director, Martin Laframboise, has been meeting with each of our 60+ members to build a database containing key statistics about each member company. We are also researching technological changes that can automatically capture member data and statistics as part of the annual membership renewal process.

“More than 50 Bermudan university students have been employed through the BILTIR internship programme.”

What plans do you have for the year

BILTIR’s strategic direction is built around four main pillars: local advocacy, international advocacy, learning and networking, and social impact. Under local advocacy, BILTIR strives to maintain Bermuda’s commercial appeal through close engagement with regulatory and government officials. Our main focus in this area is currently the Global Digital tax.

Internationally, we seek to preserve and advance the global reputation of our industry and our jurisdiction. We closely monitor developments in the US and EU, to keep members informed and advocate when warranted.

To foster learning and networking for our members, BILTIR will be hosting its annual conference on September 22 in person. BILTIR will also be organising monthly roundtables on key topics throughout the year. Social impact efforts will focus on supporting Bermuda’s schoolchildren through internships and scholarships, as well as environmental, social and corporate governance and diversity, equity and inclusion-focused initiatives.

How does your strategic plan build long-term stability for the life industry?

Life sector clients have a long-time horizon, so a key pillar of BILTIR’s strategic plan is to support the stability and dependability of Bermuda as a jurisdiction. Through our social impact efforts, BILTIR promotes inclusive growth, so that the Bermuda community reaps benefits when our sector grows. This occurs, for example, through the creation of job opportunities for Bermudans in our sector, and through direct donations for scholarships and Bermuda College career development programmes.

What progress has BILTIR made with student and graduate outreach programmes?

BILTIR is committed to supporting young Bermudan talent. We are especially pleased to administer an annual summer internship programme, in which our member companies provide Bermudan university students with valuable work experience. To date, more than 50 Bermudan university students have been employed through the BILTIR internship programme, and several are now thriving insurance professionals in our sector.

Throughout the 10-week summer programme, the interns also participate in weekly educational sessions which cover a variety of life insurance topics.

In 2016, BILTIR established an annual scholarship for Bermudan university students interested in the insurance field. BILTR also conducts a tutoring programme at CedarBridge Academy to support students writing math GCSE exams, and a Lunch & Learn programme to inform local high schoolers about careers in the life sector.

BILTIR member companies support more than 50 charitable initiatives and have donated more than $4 million to community causes. Athene Life Re has committed funds to establish a career development centre at the Bermuda College. BILTIR has also adopted a portion of the Bermuda Railway Trail, and employees of BILTIR member companies gather monthly to do our part in preserving the environmental beauty of Bermuda.

How would you characterise diversity, equality and inclusion initiatives in Bermuda’s life industry?

The situation is improving, particularly when it comes to gender, with a large number of female senior executives currently employed in the Bermuda life sector. Racial diversity is not as strong, but BILTIR is actively seeking to grow and promote local talent, which would improve racial diversity as these staff are increasingly promoted into senior management positions.

How is BILTIR managing the challenge of growth alongside a small pool of local talent?

It is challenging to find talent both locally and overseas. Through the various community initiatives I’ve mentioned, BILTIR is committed to fostering local talent for the life industry. When it comes to employing staff from overseas, the work permit process is challenging but we are seeing improvements.

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