With the insurance sector facing mounting pressure because of private equity ownership, chief executives on a panel at the Bermuda International Long-term Insurers and Reinsurers Life and Annuity Conference did not see a problem as long as companies focused on balancing needed growth with sound risk management.

“I think that there has been a narrative over the last several years of private equity/asset management ownership of insurance, that somehow it’s been a bad thing,” said Jonathan Moss, the chief executive of Resolution Re.

American insurance regulators have voiced growing concern about the increasing use of offshore reinsurance by American life insurers, a trend that has seen nearly $0.8 trillion in reserves ceded offshore since 2017, according to Moody’s Investors Service.

At a March meeting of the National Association of Insurance Commissioners, regulators discussed the need to boost transparency around capital and investment risks involving offshore reinsurers that may not meet US actuarial reporting standards.

While some jurisdictions hosting the insurers, such as Bermuda, are acknowledged to have strong regulatory frameworks, Moody’s views the overall shift offshore as a credit negative for the sector.

However, panellists, which included the chief executives of several Bermuda-based companies, said the issue was more nuanced than regulators made it look.

Mr Moss continued: “I'd say today I work for a company that is privately owned.

“Very shortly, I hope that we close our transaction with Nippon, and suddenly we will be a subsidiary of a very large company,” he added, referring to Nippon Life Insurance’s plan, announced in December, to acquire all the shares it does not own in Resolution Life Group Holdings for about $8.2 billion in cash.

He continued: “Does that change anything in the way that we run the business? Absolutely not. I think the focus shouldn’t be on the ownership model. It should actually be on the business model.”

He suggested that in the conversations that he had with the Bermuda Monetary Authority and other stakeholders, the question should be: “Do we understand the risks that we're taking and so forth?”

Panellists added that what perhaps deserved more attention were the risks associated with illiquid assets.

“Our biggest concern is actually on the increasingly illiquid assets that are actually being held across all the balance sheets, and the, I’d say, increased credit risk that actually is being taken. I think it’s very difficult to sort of see the movement, you know, in terms of assets and balance sheets, without recognising that increase,” said Imran Siddiqui, the chief executive of Talcott Financial.

On regulatory oversight, Mr Moss added: “We welcome the strengthening — things that have gone to increase the transparency with which insurers are operating. Obviously, later this year and next year, we'll have, for example, increased asset disclosure, so we will be able to see some of the risks. I think that will build the industry as a whole up, so we welcome those changes.”