Bermuda could spark a “ReinsurTech revolution” by combining its existing InsurTech capabilities with the island’s reinsurance expertise and regulations, according to panellists at an industry roundtable hosted by AdvantageGo, the commercial re/insurance software platform from NIIT Technologies.
Experts agreed that Bermuda’s business environment is more accommodating to innovation than any other jurisdiction, creating an environment that allows the global reinsurance sector to build and test new products as quickly as the technology develops.
“Bermuda has a real advantage. It is not shackled by the complexities of London, and the island should be able to innovate and develop new types of products that relate closely to the technology that is now available,” said John Racher, Vice President of AdvantageGo, NIIT Technologies.
InsurTech start-ups are also less constrained by regulation in Bermuda, where the recent Insurance Amendment Act 2018 has allowed companies to test InsurTech solutions before they investment in operational deployment.
“The opportunity for InsurTech and ReinsurTech start-ups to use Bermuda as a base for innovation has never been better,” continued Racher. “Supported by Bermuda’s government and regulator, the Island can continue to attract technology to the reinsurance industry without compromising any underlying regulatory principles.”
“I think the market in Bermuda has been excellent at creating innovative structures to transact reinsurance business,” added Simon Storey Principal and Chief Technology Officer, Nephila Capital. “The reinsurance community has benefited from being able to work very closely together on these structures and transactions.
“One of our fundamental objectives has always been to reduce the friction that exists throughout this process, this was done with the ultimate goal of creating an effective and efficient marketplace for risk transfer.”
Panellists also agreed that the biggest winners from the InsurTech revolution could be brokers, provided that they can respond to the digital revolution with inventive solutions that harness their vast levels of data.
However, some members of the roundtable argued that the InsurTech bubble could be set to burst, claiming that many examples of innovation are filled by hype rather than commercial viability.
Overall, the discussion reflected many of the findings of AdvantageGo’s recent InsurTech Survey of insurance and reinsurance executives, which established that upgrading technology is the foremost concern for industry leaders.
AdvantageGo also noted that, while InsurTech has already had a profound impact on the primary insurance market, the reinsurance and alternative capital markets have often struggled to align new technologies with their traditional way of operating.
It suggested that reinsurers have largely taken a cautious approach to technology, choosing to collaborate with established vendors rather than creating anything truly disruptive, but maintained that further InsurTech integration could still be game-changing for the reinsurance market.