I was excited to be back in Bermuda earlier this month, and not just because it’s such a beautiful island. The London market has had the double whammy of restrictions imposed by Lloyd’s and Covid-related losses, resulting in a pessimistic atmosphere. In contrast, it was exhilarating to experience the energy and positivity in the Bermudian re/insurance sector.
While the island’s tourism industry has taken a hammering because of Covid travel restrictions, Bermuda has continued to welcome new companies, capital and investors.
The signs are all there – a new international airport, overseas spending up, and soaring property prices. Anecdotally, headhunters said their phones are ringing off the hook, and hairdressers said they were busier, while it was difficult to get a table at a high-end restaurant on a Monday.
Bermuda remained open for business during the pandemic and last year, 733 new international firms and partnerships registered in Bermuda – a 7.6% increase from 2019.
Historically, Bermuda has been adept at responding to major events and catastrophes, and the government, business sector and Bermuda Monetary Authority were as quick and efficient as ever despite the challenges presented by Covid. Last year, 72 new re/insurance firms started up on the island as part of a market comprising 1200 re/insurance firms holding assets worth more than $980 billion.
One of the reasons Bermuda is known as the World’s Risk Capital, operating in 150 countries, is its impressive pool of talent. The Class of 2020 – arguably the strongest group of new companies for a generation – has focused on Bermuda’s core lines of property and casualty, as well as paying close attention to newer climate and cyber risks. They are an impressive cohort of experienced players, some of whom came out of retirement to ‘get the band back together’ again to take advantage of the hardening market and set up new firms.
Bermuda-based start-ups include Arcadian, Conduit Re, Helix, Mosaic, SiriusPoint, and Vantage, with many other companies raising new capital on an existing balance sheet and others via a new structure.
While low interest rates have made it harder to generate profits from investment portfolios in recent years, they also mean it’s cheaper to finance growth through debt. Global investors have also been attracted to Bermuda, keen to back the island’s risk transfer experts. Bermuda’s expertise makes it the logical choice as the world becomes less certain in the face of increased and more severe natural disasters such as the European floods and Hurricane Ida, as well as cyber risk, the possibility of future pandemics, and social inflation.
After months of gloom in the UK and being unable to travel internationally, it was refreshing to be back in the buoyant Bermuda re/insurance sector with its can-do attitude. I came home buzzing with new ideas, confidence and energy. I’m already looking forward to my next trip.