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Test yourself on our important insurance and reinsurance sector

International business: the insurance and reinsurance sector is a major component in Bermuda’s economy, but how much do you know about the business? Moneywise presents a short quiz to test your knowledge (File photograph)

Readers, The Dawn of New Beginnings: Book one of the Bermuda Islander Financial Planning Primer series, steps 1-10, Your Personal Investment Review, can be found at https://www.royalgazette.com/bermuda-islander/

This is the inception of a new monthly series on international business and Bermuda’s economy.

It is said so routinely that we take it for granted. International business is the largest contributor to our economy, our very real bread and butter. Right now, readers, we should be well aware that this business is incredibly more important than ever to the health of our economy.

But, what can you tell me, right off the cuff, about what they do, how they operate: where, how, when and with what? And what about the ancillary support industries?

No idea?

Yes? You do understand everything they do, plus you make it your contribution to help the local economy by telling everyone interested in Bermuda what a fabulous business environment exists here.

Well, ok. We think we know everything about international business, one component being insurance, at least how it applies to us. So, for you all not connected to these industries, here is a quiz on a couple of our international business components: insurance and reinsurance.

Let’s see how you do.

Note: There may be more than one right answer, and these are just general observations.

And for those that are not terribly interested, what can I say? Learn a little, live adequately; learn continuously about how our economy and world operates, live to the fullest, and at least, in the future, you’ll possibly have a better idea of what risk and insurance coverage means.


1.What is a subordinated bond?

a. A security that I bought from a brokerage firm that pays principal and interest to me

b. It means there are bonds in line before it

c. It is a bond of attachment to a second-class friend

d. It is a debt instrument issued by companies whose guarantee is subordinated to the payment of other liabilities.

2. What does Solvency Capital Requirement mean?

a. I need to have enough money to pay my bills

b. Governments need capital reserves to finance infrastructure

c. The Bermuda Monetary Authority takes care of this

d. Directive in European Union law that codifies and harmonises the EU insurance regulation.

3. Describe a vertical cover

a. It is used to cover windows in hurricane events

b. A slang alternative term for a raincoat, or a hat

c. Multiple limits of coverage lined up next to each other

d. The cover on an air conditioner thermostat

4. What is IBNR? We are going to talk about this a lot in future articles

a. It is a professional qualification in the insurance industry

b. Describes property and people after severe geographical damage who may have insurance

c. The insurance company knows there was a catastrophe, but not how much damage

d. A calculation to allow for losses which may have occurred but have yet to be reported to the insurer or reinsurer.

5. Describe a pool

a. It is in our backyard, but we never use it because no one wants to clean it (actually, we don’t have a pool)

b. Similar to a pond of ducks

c. A group of professional colleagues

d. An organisation of insurers or reinsurers through which particularly dangerous risks are written and shared on a percentage basis, e.g. terrorism, nuclear risks, etc.

6. What is the Poisson Distribution Theory?

a. French description of fish

b. Has similar taste to coquille st. jacques

c. Name of an old Bermudian fishing boat

d. Mathematical theory that describes the probability of loss incidence at different return periods.

7. Bermuda has a large ILS market, what is an ILS?

a. ILS stands for income leveraged standing, those people with higher leverage make more money

b. They are listed on the BSX

c. ILS allow insurance and reinsurance carriers to transfer risk to the capital markets and raise capital or capacity.

d. Just another annoying acronym

8. What is a captive?

a. Describes people being held hostage

b. Listening to the conversation, he was captivated by the content

c. Generally defined as an insurance company that is wholly owned and controlled by its insureds

d. Wholly-owned subsidiary of a larger firm that is tasked with writing insurance policies for the parent

9. What are hedging techniques?

a. What a landscape manager does to create a beautiful garden

b. My car was so hedged in the parking lot, I had to take de bus home

c. When playing blackjack, a good tactic is to hedge your bets

d. Hedging uses alternative strategies (leverage, etc) to earn active returns, or alpha for investors

10. What is alpha?

a. Comes before beta, gamma, and delta

b. The excess return of an investment relative to the return of a benchmark index

All right, so you’ve realised this is a nonsensical quiz, but, there are some very real bits of information enclosed within, so much information that if you felt like searching google with just one word e.g. ILS, would take hours to read through.

We have so much to learn about, and from international business industries and residents on our shores. I plan to illuminate some of their impressive credentials and workings in ordinary person’s language and sensibilities in articles and my next book in the Bermuda Islander Financial Planning Primer Series: Money, Risk, and Relationships in Bermuda Islanders Every-day Life.

For today, our first thought heading into this new year should be absolute gratitude for IB’s contribution to our economy.

My wish for all readers and Bermuda Islanders is for a better New Year!


Held Captive: A History of International Insurance in Bermuda, Catherine R. Duffy, AIG Country Leader

Artemis: www.artemis.bm Catastrophe bonds, insurance linked securities, reinsurance capital & investment, risk transfer intelligence.

GR Global Re/insurance https://www.globalreinsurance.com/

CCR-RE https://www.ccr-re.com/en/home

Investopedia https://www.investopedia.com/terms/h/hedgefund.asp

Author Martha Harris Myron, CPA JSM, a native Bermudian, is author of The Bermuda Islander Fundamental Financial Planning Primers: Books 1-9 with all specifically focused on Bermuda financial and economic matters, international financial consultant to the Olderhood Group Ltd Bermuda, and financial columnist (since 2000) to The Royal Gazette, Bermuda. All proceeds from these articles are donated by The Royal Gazette to the Salvation Army, Bermuda.

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Published January 02, 2021 at 8:00 am (Updated January 01, 2021 at 6:29 pm)

Test yourself on our important insurance and reinsurance sector

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