Assessing Bermuda's role in closing the global protection gap

BILTIR CEO dives into recent report

Assessing Bermuda's role in closing the global protection gap


By Mia Wallace

Since its inception in 2011, Bermuda International Long Term Insurers and Reinsurers (BILTIR) has established itself as a voice and an advocate for the success and growth of the long-term re/insurance sector in Bermuda – and beyond.

The health and importance of Bermuda as a re/insurance hub was under scrutiny in the association’s recent ‘Building for the Long Term’ report which BILTIR CEO Suzanne Williams-Charles (pictured) said affirmed that confidence in the market is well-founded.

“The key message that I would want readers to take out of the report is the overarching commitment of the Bermuda re/insurance market – and specifically our BILTIR members – to operating in a high-quality, reputable jurisdiction and to being appropriately regulated in order for policyholders to believe that they are being protected,” she said. “That’s where a lot of the scrutiny comes from, because we’re operating in that sensitive area of retirement savings, where people need to feel like they can trust that when they need the insurer and reinsurer to come through, that they’ll be there.”

Closing the global protection gap

That policyholder protection piece is one of the report’s three overarching themes, she said, while the closing of the global protection gap represents a second. On the latter, she highlighted the importance of making people understand how much financial support the market has provided over the years. BILTIR members made a total of $137 billion in payments to policyholders in connection with the closing of that protection gap over the last five years – and it’s an ongoing commitment.

“I also think Bermuda re/insurers have a reputation for settling payments quickly to make sure that people get what they need, when they need it,” she said. “Then the third theme is around the scrutiny of the investment portfolio of re/insurers in this space. For us, it’s about making sure the quality of the investments being made is clear, and that’s about how they’re being managed and where they’re being managed.

“There has been some lack of understanding and clarity around these themes. And our report [highlights] a lot of key statistics that show the quality of the assets under management. Ninety-two per cent (92%) of our rated assets under management are investment-grade or above.”

What’s happening across the Bermuda re/insurance landscape?

Williams-Charles noted that what BILTIR’s survey made clear is that its members are well-capitalized and hold quality assets, providing security and assurance for policyholders. However, looking across the market she can see the range of both opportunities and challenges pressing on the sector.

The Bermuda marketplace is well-established, she said, and she knows both from her time working at the Bermuda Monetary Authority (BMA) and at a range of other global organizations, the BMA is well respected by its peers. That’s an important point to acknowledge, she said, because there has been a lot of scrutiny of the remit of the life sector in Bermuda.

“A message I think it’s important to make, connected to that scrutiny, would be that external regulators which may have policyholders who are ultimately being reinsured by companies in Bermuda, have a responsibility to the policyholders in their jurisdiction,” she said. “And they have to prioritize those policyholders. So, I think that scrutiny should not be seen as a lack of faith or any type of criticism of the regime.

“The BMA has set up an appropriate mechanism of cooperation in the regulatory community. They operate in a very transparent manner and I think that if you asked other regulators who have to interact with them on a regular basis, they would be able to confirm that. Not every regulatory regime or regulator is as transparent as the BMA are with respect to the work that’s going on there, and what they’re doing with specific companies or groups that they have in common.”

Where does the market go next?

The market has grown significantly over the years, which has been partly driven by a series of regulatory and supervisory enhancements in the life space which have led to Bermuda’s positioning as a global hub for reinsurance. That has only improved the reputation of the market, and William-Charles’ ambition as leader of the association is to continue to push for Bermuda to be seen as a thought leader in this space.

A challenge not just for Bermuda, but for so many countries now, is how to harness the growing demand for innovation and to use innovative new ideas and technologies to their advantage. New products are needed to meet the needs of policyholders, she said, while efforts also need to focus on increasing the takeup rate of existing products and communicating and educating people more effectively on why they’re important.

“That’s a challenge and it’s a challenge globally,” she said. “We look to support education and innovation in Bermuda so that we can make some strides to help close the protection gap. I think our jurisdiction is well-placed to do so; we have a sound regulatory framework in Bermuda and we have decades of great talent on the island.

“When I walk into BILTIR, in every meeting, I’m talking to some of the smartest people I’ve ever come across in my life, and at such a high concentration. This is the place for innovation and solutions. And I’m very excited to be a part of the organization and its ongoing journey.”

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