Britain’s impending departure from the European Union will be good for Bermuda’s reinsurance industry, according to the man at the helm of one of the sector’s leading companies.

Kevin O’Donnell, chief executive officer of RenaissanceRe Holdings Ltd, said at a conference yesterday that even island reinsurers with a Lloyd’s of London business — like his own — stood to benefit.

“Brexit will be good for Bermuda — we have Solvency II equivalence,” Mr O’Donnell said, while speaking on a panel at the Bermuda Reinsurance conference at the Hamilton Princess yesterday.

“From that perspective, I feel very good that Bermuda is our domicile and our home base.”

Bermuda was given third-country equivalence by the European Union with the bloc’s Solvency II regulatory regime for the insurance industry earlier this year, meaning Bermudian firms can compete on a level playing field in the EU marketplace.

British insurers enjoy “passporting rights” that allow them to trade unhindered throughout the EU, but these rights are likely to go in the event of Brexit and entry to these markets would have to be negotiated with individual countries.

RenaissanceRe is one of several Bermuda reinsurers to have a Lloyd’s operation — RenaissanceRe Syndicate 1458 was set up in 2009 and wrote more than 20 per cent of the group’s gross premiums in the third quarter of this year.

“Within Lloyd’s, the European business is the most exposed to Brexit, but Lloyd’s has many agreements with other countries around the world that will be largely unaffected,” Mr O’Donnell said.

He added that RenRe was “built to be nimble” and could adapt as necessary to deal with any Brexit shocks.

Kean Driscoll, CEO of Bermudian-based Validus Re, who was sitting alongside Mr O’Donnell on the CEOs’ panel, said last week’s court ruling in the UK requiring that Parliament is required to vote before the invoking of Article 50 — which will trigger negotiations on Britain’s exit from the bloc — will be helpful to Lloyd’s.

Validus owns Talbot Underwriting, a Lloyd’s-based operation that generated more than half of the group’s gross premiums in the third quarter of this year.

Mr Driscoll said the parliamentary process would likely delay Brexit, giving Lloyd’s more time to renegotiate licensing agreements with individual EU countries — something that may already be happening, he added.

In an earlier session at the conference, Moritz Kraemer, global chief rating officer, sovereign ratings, for S&P Global ratings, spelled out a grim Brexit scenario for the UK, including falling foreign direct investment, rising inflation as a result of the weak pound and a tough bargaining stance from the EU to dissuade other members from leaving the bloc.

“We should expect that in the coming months some of the financial institutions in London will make announcements on their future plans in the case of a hard Brexit — which seems increasingly likely,” Mr Kraemer said.

The panellists also discussed the consolidation spree that has changed the face of the industry in recent years and the various types of buyers to emerge.

Mr Driscoll referred to the Canadian Pension Plan Investment Board’s agreement in September to purchase Lloyd’s-based Ascot Underwriting for $1.1 billion from American International Group. “Many pension funds are coming into the P&C [property and casualty] space and I think we will see more of that,” Mr Driscoll said. “They have a longer time horizon than most and that is good for stability, good for clients and good for Bermuda.”

Big deals in recent times in Bermuda have included Japanese insurer Sompo’s proposed $6.3 billion purchase of Endurance, Chinese investment firm Fosun International’s $1.8 billion acquisition of Ironshore and Italian investment company Exor’s $6.9 billion buyout of PartnerRe.

Mr O’Donnell said the differing types of buyers had differing measures of success.

“The Japanese buyers can pay a higher multiple because they have a much longer time window,” Mr O’Donnell said. “The Chinese want to diversify their capital and the cash buyers are looking at the return they’re getting at a funds level.”

In this environment, he added, further consolidation between reinsurance companies was likely to be “very dilutive to the acquirer”.