ABIR: Lloyd’s-Bermuda relationship thriving

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  • Lloyd's of London: Bermuda firms account for nearly a quarter of its premium volume

    Lloyd's of London: Bermuda firms account for nearly a quarter of its premium volume

Partnering with the Lloyd’s of London market gives Bermuda insurers extra credibility, according to a top lobbyist for the industry.

Bradley Kading, president of the Association of Bermuda Insurers and Reinsurers (ABIR), addressed the thriving Bermuda-Lloyd’s partnership in his speech today at the Insurance Institute of London at Lloyd’s.

“Lloyd’s and ABIR are proud partners in commercial insurance and reinsurance markets,” Mr Kading said. “Lloyd’s reputation and history helps Bermuda carriers establish credibility and gain access to markets where barriers exist — a key reason why ABIR and Bermuda are heavily invested in the UK market.”

Mr Kading gave details of the substantial scale of Bermuda involvement in the venerable Lloyd’s market.

He said Bermuda insurers had invested £3.6 billion in shareholders’ funds to 16 UK insurers. ABIR members and other Bermuda insurers account for 24 per cent of the Lloyd’s premium volume and Bermuda’s insurers have contributed more than 50 per cent of the estimated loss payments for some large European insurance events.

He added that ABIR members, comprising 21 companies with underwriting operations in Bermuda, employ 5,500 people in the UK.

In December, Lloyd’s of London Chair John Nelson called ABIR and Lloyd’s underwriters “trusted competitors and partners”.

Mr Kading cited numerous benefits that Bermuda and London each bring to the partnership:

• ABIR’s members’ $95 billion in capital builds a strong financial foundation for Lloyd’s and the London company markets.

• ABIR’s members’ leadership in property catastrophe reinsurance globally creates opportunities for Lloyd’s syndicates.

• ABIR’s insurers’ US market subsidiaries afford Lloyd’s franchises with business opportunities.

• ABIR’s members’ balance sheets create global diversification benefits which expands capacity.

• Lloyd’s global licences benefit ABIR members with Lloyd’s syndicates.

• Lloyd’s reputation and history helps Bermuda carriers establish credibility and provides access to markets where barriers to entry may exist for Bermudian legal entities.

• Lloyd’s speciality market business creates business opportunities for ABIR’s members.

• Lloyd’s efficient capital rules lead to higher returns on equity that benefits shareholders.

Mr Kading noted that Lloyd’s, the London company market, ABIR and other insurance associations are united in their efforts to battle global protectionist legislation and excessive regulation.

In his speech, Mr Kading cited five measures where the global insurance market is united in its fight against this harm to the industry:

• Ensuring that the Insurance Capital Standard (ICS) under development from the International Association of Insurance Supervisors (IAIS) does not create excessive or duplicative regulatory capital requirements.

• Certifying that the European Union’s Solvency 2 rules are implemented in a way that minimises overlap and redundancy in group supervision while instilling trust and deference for equivalent group supervisors.

• Resisting efforts to localise assets and capital, limit branching or limit cross border trade.

• Opposing jurisdictional action to limit affiliate transactions via regulatory or tax policy.

• Promoting the reinsurance value proposition that global diversification of risk via cross border reinsurance expands capacity, keeps markets competitive and creates lower prices for consumers.

“We have many global challenges on which ABIR, the London company market and Lloyd’s are working together,” Kading concluded. “The stronger the partnership with our international counterparts, the more successful we will be in fighting the rise of protectionism.”

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Published Feb 26, 2015 at 1:21 pm (Updated Feb 26, 2015 at 1:21 pm)

ABIR: Lloyd’s-Bermuda relationship thriving

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