The question isn’t why life insurers have come to Bermuda, but rather why others haven’t yet, Brad Adderley, office managing partner & head of corporate at Appleby Bermuda, told delegates at the Bermuda Risk Summit.
“We often hear in Bermuda of creating a new pillar of the economy. I actually think that life insurance is a new pillar,” he said.
“Over the years, you’ve seen almost every single major offshore direct life insurer form in Bermuda, from start-ups to blue chip, and you’ve seen direct life insurance in Bermuda naturally transform into reinsurance. Due to the nature of the marketplace in Bermuda, you can have business flow from direct life insurance into reinsurance companies, along with closed-off businesses, which I think is really interesting.
“When you think of another pillar to the economy, every new start-up in Bermuda, whether it’s P&C or life, it’s going to have to start with 2-4 people on the Island. So, when you think of the advantages to Bermuda of the life insurance market and what it brings, you could see 10-15 new life insurers being formed each year as there were last year, and each one will have two people from day 1 and then they do a hiring plan for the next 2-3 years. So you’re talking about 30 new jobs in the next few years, which are mostly C-suite.”
Adderley moderated a panel discussion at the conference about the Island’s role in the growing life insurance sector. The discussion was based on the assertion that, in a world where the pandemic has brought about an increased awareness of mortality risk, Bermuda’s life re/insurance sector has an increasingly significant role to play.
The panellists were Nicola Hallett, director of Captive & Commercial Insurance at Artex, Amy Ponnampalam, CEO of Athora Life Re, and Martin Spit, Partner at EY USA.
Last year, 14-15 new commercial life companies formed in Bermuda, Adderley said, before asking how many the panellists expected would be added by the end of this year. Ponnampalam said 10-12, Hallett 15 and Spit 20, while Adderley said he expected 16-17.
“The reputation of the jurisdiction as a whole and the reputation of the BMA, means it’s almost like, why are you not choosing Bermuda,” Adderley said. “If you look over the last 10 years, the vast majority of life reinsurance formations in the offshore space has been in Bermuda, like 99.9%. So now it’s almost like, if you do choose another jurisdiction, you almost need to defend that position to your board because everyone else has chosen Bermuda.
“I wonder now if Bermuda is becoming a real marketplace where what we’re seeing is existing life players doing a first transaction with other Bermuda players. Come to Bermuda, raise your capital, there’s a great regulator and you actually do business with each other and consummate a transaction, at a conference like this one.”
He added: “Previously you might have seen a new start-up doing a first deal of $500m. Now, you’re seeing deals of $8bn, $10bn, $20bn. That’s a lot of numbers and the fact that the onshore regulators are allowing those businesses to come offshore is a testament to the jurisdiction and to the BMA’s reputation in the marketplace.”
Appleby, Artex, Athora Life Re, EY, Bermuda Risk Summit, Life, P&C, Insurance, Reinsurance, Brad Adderley, Nicola Hallett, Amy Ponnampalam, Bermuda