Island’s reinsurance market set for ‘new era’
Bermuda is ideally placed to come to the fore in a new and better era for the reinsurance industry when the Covid-19 pandemic is over.
Its track record for innovation and reinvention within the industry is among the reasons Ryan Mather has optimism that Bermuda will “do great again” in the post-Covid-19 world.
“This is going to be the beginning of a new era for the reinsurance industry. The last era in my mind started in 2002, post-9/11, so we have been in that market for 18 years,” he said.
“This will be the start of something new and something better for us all. Bermuda is ideally placed, and it has always come to the fore in a crisis in recent times. If you go back to the Seventies with captives, and the Eighties with the casualty crisis, and 1992 with Hurricane Andrew, and then after 9/11. Bermuda is going to do great again.”
Mr Mather, who is global head of reinsurance at Argo Group, and the former chief executive officer of Ariel Re, said the island's proximity to the US was very important both in terms of clients and access to capital.
“Wall Street is still where all the capital is, and we are just a stone's throw away from that. That is where we will have to go, because we will have to raise more capital in the industry,” he said.
“From a legal position, Bermuda is in a great position because it essentially follows UK law, which is respected and trusted throughout the world. From a regulatory perspective, we still have a great regulator in the BMA. And we have people on this island who just live and breathe insurance and reinsurance and understand it deeply.”
He said the crisis “will force us to innovate how we work”, and cited as an example the invention of the bicycle, following the eruption of Mount Tambora, in Indonesia, in 1815, and its subsequent impact on the world's climate.
Mr Mather was among the speakers on a webinar hosted by Bermuda's Women in Reinsurance group, which looked at the re/insurance industry post-Covid-19.
Another speaker was Kristen Beasley, head of healthcare broking, North America, at Willis Towers Watson. When asked about winners and losers that would emerge in the wake of the pandemic, she said: “The insurance industry is a winner as a whole. We have been able to hold our jobs and transition to working from home.”
She said offices with departments would be winners, while open-plan room designs would be losers.
Ms Beasley also warned about the future impact of litigation.
“This whole pandemic has highlighted the severe issues we are going to have around coverage litigation that is going to be coming,” she said, adding that no one would win from litigation because of the cost and the drawing of lines between clients and carriers.
“It is already playing out on the property side with business interruption; there is already litigation in motion. The tsunami of litigation that is coming is going to have a ripple effect for many years.”
Also taking part in the webinar was Tracey Gibbons, a senior vice-president at Third Point Re; Jelena Strelets, actuarial advisory lead at EY Bermuda; and moderator Peta White, senior managing director — head of North America property reinsurance at Markel Global Re, and chair of Women in Reinsurance.