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Bermuda leading the way on legacy insurance

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Panellists William O'Farrell, Shireen Gammoh and Barry Gale (Photograph by Akil Simmons)

Bermuda’s financial services regulator has played a pivotal role in the growth of the legacy solutions sector on the island, a panellist told an international audience on Wednesday at the Bermuda Risk Summit.

Barry Gale, the London-based global head of legacy at the broker Aon, said: “The role of the Bermuda Monetary Authority has been absolutely critical in the development of the legacy market — and the critical reason for that is version 1.0 and everything since then was reliant on somebody being prepared to consider the acquisition of run-off as a business model in itself.

“I think the conventional wisdom for years was a business with no new premium coming in was inherently much more risky than a business where you were still continuing to underwrite.”

He added that the BMA has exhibited Bermuda’s reputation for having a culture of innovation and a spirit of collaboration, which David Burt, the Premier, spoke of in his opening remarks at the conference on Monday.

Mr Gale said: “They asked the question ‘if you’ve got the right, relevant expertise looking at buying someone else’s run-off, is that inherently more risky than the wrong underwriting team continuing to underwrite that line of business?’.

“They were prepared to think about this as a new product line — and indeed over the years, as the structure of these deals has changed and we have gone through 2.0, 3.0 and 4.0, they’re asking the questions, collaborating with the run-off players.”

Moderator Andrew Sooboodoo, back to camera, was joined by panellists William O'Farrell, left, Shireen Gammoh, Barry Gale and James Ferris (Photograph by Akil Simmons)

Mr Gale was sitting on the panel Bermuda — A Leading Domicile for Legacy Solutions, moderated by Andrew Sooboodoo, the group chief risk officer at Fortitude Re.

He was joined on the panel by James Ferris, director, BMS Re, Shireen Gammoh, global head of capital advisory and modelling, Gallagher Re, and William O’Farrell, CEO, Premia Holdings.

Mr Ferris said Bermuda is a centre of excellence, especially for the legacy market.

He added: “There are people on the ground in Bermuda that have done this business, know legacy, know run-off, inside the regulator, in industry, in the accountants, in the lawyers.”

Mr O’Farrell said: “This is the busiest first quarter I’ve ever seen. We see more transactions that are looking to get done now that are viable, interesting and large in scale.”

The three-day Bermuda Risk Summit, presented by the Bermuda Business Development Agency, wrapped up on Wednesday at Hamilton Princess & Beach Club.

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Published March 09, 2023 at 7:58 am (Updated March 09, 2023 at 7:58 am)

Bermuda leading the way on legacy insurance

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