Now that 2019 is almost behind us and we learn the lessons the year taught us it’s time to look ahead to 2020 and what it might bring for Bermuda.
To get an idea of what might lie ahead we asked our readers the question: ‘As we look forward to 2020 what do you think will be the most important factor that the Bermuda market will have to face, and why?’.
Respondents could choose from six possible answers, with multiple choices being allowed.
Around 55 percent of readers chose further mergers and acquisitions (M&A) activity as the most important factor. The past few years have seen a substantial amount of M&A activity, as for various reasons companies and business segments have changed hands. There have been some worries that the pool of possible targets on the Island is starting to diminish.
Two options came joint second, both being chosen by 36 percent of respondents. The first was the 2020 hurricane season. The Atlantic hurricane season is always something re/insurers need to keep a close eye on, with names such as Katrina, Ivan, Rita and Wilma having carved an expensive place for themselves in the collective memory of the market.
The second option also chosen by 36 percent of readers was that of rates hardening in 2020. The market has been in a prolonged period of declining or stagnant rates for some years. In 2019 there was an uptick in rates that was widely welcomed and which has been cautiously regarded as the turn of the ratings tide.
Three options received the same number of votes: 9 percent each. Two were related to rates—readers who voted for these options said that in 2020 rates might (i) stay the same, or (ii) slip back into softening again.
The third option that 9 percent of readers voted for was the UK’s departure from the EU. The survey opened before the UK general election on December 12, so readers could have voted before or after the news that Boris Johnson’s Conservative Party had won a majority in the House of Commons, and that the chances of progress on Brexit, after several years of political paralysis, will now increase.
We also allowed readers to pick another option—‘Other’—and offered them an opportunity to explain their choice.
One reader, writing anonymously, said: “The disruption caused by wildfire events of the past three years has not yet stabilised. There is a lot going on as companies try to become better educated on wildfire. That remains the most important factor in 2020.”
Captive insurance expert Andrew Barile commented that in 2020 US state domiciles might move captives out of Bermuda because Bermuda costs continue to rise each year.
Bermuda, Mergers & Acquisitions, Catastrophe, Insurance Rates, Brexit, Reinsurance, UK, Europe