The Bermuda Monetary Authority (BMA) has authorised the first licence for its insurance regulatory sandbox, giving it to Akinova, the start-up aiming to launch a marketplace for the transfer and trading of insurance or reinsurance risks.
Insurance technology (insurtech) start-up Akinova has already been registered an entity in Bermuda, AkinovA (Bermuda) Ltd. which has become the first registration under a new BMA classification of “Innovative Intermediary” as an insurance agent, rather than as a broking intermediary.
Now, Akinova has said this morning that it has received the first Insurance Regulatory Sandbox licence from the BMA, which will allow the start-up to test out its technology in a simulated regulatory and controlled environment.
The legislative framework for Innovative Intermediaries and the regulatory sandbox came into effect in 2018, but Akinova is the first to put it to use.
Authorisation allows Akinova to work on its platform to transfer risk, which it says will allow cedents and intermediaries to transfer risks to investors. The authorisation will also allow Akinova to provide news, data, analytics and communications to users of its market.
The sandbox is designed to allow new concepts to be tested, remotely from the regulated marketplace and under the scrutiny of the BMA.
After a period of time where an intermediary provides its insurance or reinsurance related products and services within a controlled-risk space the entity could graduate from the sandbox to become a fully licensed intermediary.
The sandbox is both a way to encourage innovation in Bermuda’s financial services sector, as well as to encourage start-ups to the island.
Henri Winand, CEO of AkinovA, commented on the news, “We selected Bermuda as our first regulated operating base because of their willingness and desire to innovate within the insurance sector. The Regulators understood, right from the word “go”, the need to establish an appropriate regulatory framework for what AkinovA is building for its users, to ensure AkinovA’s independence as an infrastructure provider and a digital marketplace.
“It was really important that AkinovA is not set to compete with the very ecosystem it serves whilst being able to provide more than basic trading with the inclusion of news, data, analytics from its users and partners and secure communications to marketplace participants.”
The Premier of Bermuda, the Hon. E. David Burt, also said, “One of the largest hurdles facing the global insurance sector is the challenge of bringing developments to market amid an insurance regulatory landscape that does not always provide the flexibility necessary to accommodate new concepts at the same speed as the technology develops.
“Technology-enabled innovations in the insurance industry aims to offer simpler products and streamlined customer experiences. The challenge for many insurance companies is to determine the best way to embrace the financial technology imperative given their strategic vision and business objectives.
“The AkinovA team brings with it an extensive and somewhat unique blend of experience from Insurance, Capital Markets and Technology that we believe is needed to launch a successful electronic marketplace for the (re)insurance industry. We are confident that under the Bermuda Regulatory framework, they will help drive growth and innovation in the insurance market.”
Brad Adderley, Partner at Appleby and AkinovA’s Bermuda Counsel, commented, “We are very pleased to help AkinovA forge and continue to develop what they need to serve their clients. We are grateful for the support we have had, and continue to have, from the BMA to develop the right framework needed for AkinovA to serve its clients as a pure play infrastructure provider, whilst preserving its independence.”
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