Bright future for long-term insurers in Bermuda
The life insurance industry in Bermuda is set for growth but it needs more boots on the ground.
This was the word from industry leaders in a panel on Bermuda’s role in the growing life insurance sector, during the second day of the Bermuda Risk Summit 2022.
“Just looking back seven or so years ago there were hardly any class C insurers in Bermuda, but recently we have seen record registrations,” Artex director of captive and commercial insurance Nicola Hallett said. “Biltir quotes that at the end of 2021 there were about $670 billion in assets under management in the life sector, which makes it the largest sector in Bermuda.”
And she pointed out that in the ten years that Bermuda International Long Term Insurers and Reinsurers has been in operation it had grown from five members to 64, reflective of the massive growth in the industry.
She said traditional business came from North America, but in recent times she had seen a lot coming from the Asian market, particularly Japan.
“There is currently an overhaul of their regime in Japan,” Ms Hallett said. “That could be a factor to do with that. There is a real big growth element, which is really encouraging.”
Ms Hallett thought there was room for more life insurance in Bermuda.
“From what we are seeing, there is capital around,” she said. “There are a lot of these insurance companies that are looking for captive efficiency.”
Amy Ponnampalam, chief executive officer at Athora Life Re Ltd said that when she first came to Bermuda in 2010, the solvency margin requirement was $250,000.
“No matter how big you were or how complex your risks, that was the capital requirement,” she said. “Look at where we are now. The solvency equivalence happened shortly after I arrived, and then the life industry really boomed. It has been a really exciting time to be here.”
But she cautioned that the life insurance industry in Bermuda had to grow at a pace that was supportable.
“It is a matter of quality, not quantity,“ Ms Ponnampalam said. ”Unlike the P & C market which has been very long established in Bermuda, life is comparably new. We are still treading new grounds with the European regulators. We don’t want anything to go wrong. We want to build up the credibility of Bermuda and the Bermuda Monetary Authority, and really showcase how strong a jurisdiction we are to do that. We don’t want to grow too quickly.”
Ms Ponnampalam said demand for life insurance industry talent in Bermuda was “huge”, but the Bermudian talent space has been very limited.
“That really speaks to the role that we need to play in changing that picture,” she said. “That means doing a lot more on schooling, investing in education, internships, scholarships, and really promoting young talent.”
Ms Ponnampalam said there was a particular shortage of life actuaries on the island.
“It is difficult to get them in,” she said.
EY partner Martin Spit said a lack of talent on the ground was a major constraining factor in allowing companies to develop quickly here, and scale up.
“It is a key topic that I hear my clients talk about in terms of driving more business to Bermuda,” he said.
The panel was moderated by Brad Adderley, managing partner of Appleby’s Bermuda office.
The Bermuda Risk Summit 2022 continues today at the Fairmont Hamilton Princess & Beach Club, hosted by the Bermuda Business Development Agency.