Bermuda has successfully continued to attract global re/insurers as the Bermuda Monetary Authority (BMA) continues to introduce significant new requirements to regulate the market in its jurisdiction, a move that has had a very significant financial impact on the island’s life and long-term sector, according to BILTIR’s CEO Suzanne Williams-Charles.
In a recent interview with Reinsurance News, BILTIR’s CEO spoke about Bermuda’s strong regulatory regime.
Williams-Charles says the BMA isn’t strengthening requirements to keep up with the rest of the world, but instead is at the forefront of solidifying the life re-insurance sector with robust and progressive regulations.
“Bermuda has a very well established marketplace, we are seen internationally as a jurisdiction that has a world-class regulator, and I would consider us and our regulatory environment to be well respected by peers. The regime that the BMA has put in place continues to evolve in order to address their ability to stay in line with international standards,” Williams-Charles explained in a recent interview with Reinsurance News.
The constant enhancing of regulations by the BMA is also an attraction, despite causing some financial impacts, as re/insurance businesses also make moves to adapt to these, looking for an environment that fits with their business plan, the CEO noted.
Bermuda’s alignment with other key jurisdictions such as the US, Europe and the UK is also highly important, Williams-Charles stated. She believes that these relationships and the recognition of a high standard of the regulatory environment in Bermuda is critical for continued success.
Williams-Charles also spoke about the growth of the reinsurance industry in Bermuda.
Alongside the expansion of the reinsurance industry was the formation of BILTIR, which was formally incorporated on June 9, 2011 by five founding member companies. The organization has grown tremendously alongside the booming Bermuda reinsurance industry and now has over 70 members, a reflection of the market both locally and globally.
“The life sector has been around for quite some time, but it really started to evolve in the late 20th century, and the BMA has evolved the regulations for this particular sector over time in order to stay in line with the risks that have been presented. There has been a lot of innovation and diversification just in this sector,” said Williams-Charles
“With all this, we’ve continued to attract new business to the island and to me, that says that people want to be regulated in a jurisdiction that has a robust framework and they’re not afraid of it and that this is an environment that they believe is necessary to execute their business plan,” said Williams-Charles.
The CEO also recognised that the regulations have had very significant financial impact on the life and the long-term sector in Bermuda which has led to a bit of attrition, resulting in some businesses leaving the jurisdiction.
“There was a very robust consultative process carried out by the BMA and it ended in very significant changes that caused a bit of attrition. It has been a bit of a journey and I think that there was an expectation that maybe companies might decide that they did not want to be regulated in this way.
“But in the end there was very minimal attrition. After the dust settled some companies realised that this wasn’t the right environment for them, but that is not a negative thing. I think that you have to be where it’s appropriate for your business plan.”
Williams-Charles comments follow the release of BILTIR’s report on the state of Bermuda’s reinsurance industry.
The evolution of Bermuda’s reinsurance sector was highlighted in the release of BILTIR’s recent report, Building for the Long Term: Examining the History, Future, and Importance of Bermuda’s Long-Term Insurance Market. Data points highlighting the strength of the industry in Bermuda.
- 92% of BILTIR’s members’ rated assets under management are investment-grade and 95% of their bonds, debentures, and structured assets are investment-grade.
- 77% of assets have additional protection in the form of secured trusts, fund with-held, or MODCO.
- BILTIR members made total benefit payments of $137 billion in the last five years.
- Among BILTIR’s members, assets held exceed liabilities by $231 billion.
The statistics, backed by the strength of the companies in the sector have Willams-Charles confident about the future success of the market in Bermuda.
“I’m optimistic about Bermuda’s position and about BILTIR as an organisation and our position locally and abroad. I think that the BMA has introduced a number of enhancements to their regime that have become the best practice model for the world.”
