ILS plays vital role, convergence continues apace: ILS Bermuda speakers

The insurance-linked securities (ILS) market plays an increasingly important role in supporting global insurance and reinsurance protection, while at the same time the convergence of ILS with traditional market structures continues apace.

Introducing today’s ILS Bermuda Convergence 2019 conference held in Hamilton, speakers discussed the key role of ILS in the world and Bermuda’s significant role in supporting and driving its growth.

Kathleen Faries, the Chair of the ILS Bermuda Ltd. organising committee, explained that “the lines are blurring” between the alternative and the traditional in reinsurance, as ILS growth continues and the capital markets find an increasingly wide range of ways to tap into insurance-linked returns.

“It’s evolving,” Faries said, noting that “At first ILS was considered a threat, but over the years the capital that has come in has blended with traditional capacity in so many different ways.”

“Without a doubt, technology over the next few years is also going to have an influence on this evolution,” she continued.

Saying that given its history of innovation, “Bermuda remains well-placed to continue to lead the rapidly evolving world of alternative reinsurance.”

The ILS market in Bermuda has evolved into a “best-in-class insurance-linked securities (ILS) market” which is testament to the islands ability to deliver on innovation within a business friendly environment.

“The constant throughout has been Bermuda’s ability to support and deliver this evolution of insurance,” Faries said.

Andy Burrows, the CEO of the Bermuda Business Development Agency (BDA), said in his introduction that the evolution of insurance-linked securities is testament to Bermuda’s ability to innovate.

“Bermuda continues to maintain its position as the leading jurisdiction for ILS. We are best placed to continue to drive and support the growth of this industry,” Burrows explained.

The Hon. Curtis L. Dickinson, Minister of Finance in the Government of Bermuda, also welcomed attendees to the Convergence 2019 conference, highlighting that “Behind the history of Bermuda’s place in this market, is innovation.”

Evidence of this was seen recently, Dickinson said, in the passing of the Insurance Amendment Act of 2019, in which the new collateralised insurer class was enacted.

This was “Specifically created to support the ongoing innovation of insurance-linked securities,” Dickinson explained.

Which he noted as particularly important as ILS has a vital role to play in society more widely.

“Helping more of those in our global community represents the best use of alternative reinsurance and risk transfer products,” Dickinson said.

Adding, “ILS plays a vital role in getting protection to vulnerable people and places.”