The deputy governor of the Bank of England and CEO, the Prudential Regulation Authority, has stressed that while the regulatory body remains concerned about the robustness of the management of risk it is also not the regulator’s role to prevent entry into an industry.
Speaking at the Bermuda Monetary Authority’s 2014 insurance seminar, he said: “The fact that there is capital coming into the industry is not something that we should react adversely to.
“One of the things we’re concerned about is underwriting standards and we’re obviously also concerned about the robustness of the management of risk and the spreading of risk, so those should be the points of our focus to ensure that, given we have new capital coming in, that the process maintains the prudential standards we expect.”
Frank Majors, co-founder and principal, Nephila Capital, said that institutional investors definitely think of catastrophe risk as an asset class, to which Bailey replied: “In a world with persistent very low interest rates, the emergence of alternative asset classes was entirely logical.”
Bermuda, Europe, Bermuda Monetary Authority, Frank Majors, Insurance, Reinsurance