WRIN.tv catches up with Bradley Kading, President and Executive Director of the Association of Bermuda Insurers and Reinsurers (ABIR), to discuss the state of the Bermuda (re)insurance market, international concerns over Brexit and the U.S. presidential election, and opportunities he sees on the horizon.
The Bermuda market suffered from soft pricing in 2016, with the ability to earn a profit based on adverse claims and expense control. ‘It’s tough to make a buck,” according to Mr. Kading. The focus on expense control has led to an increase in mergers and acquisitions (M&A).
In 2017, there is a focus on issues such as Brexit and elections in the Netherlands. Germany and France, after the U.S. election. The question: is there an unraveling of the international consensus that “international trade is good”? If so, that is a fundamental change. ABIR supports international trade, believing it leads to competitive markets and consumer value, as well as greater capacity for the industry to take on risk and make economies more stable.
With the new Trump administration entering power in the U.S., Mr. Kading sees opportunities for global (re)insurance markets with additional risks being “privatized”, risks like flood, mortgage, crop or terrorism. He also notes work being done by the Insurance Development Forum (IDF), which us tied to doing work with governments around the world. The IDF is expected to promote increased penetration and insurance knowledge transfer to support government infrastructure projects, as well as public-private partnerships (PPPs) and micro insurance.
Mr. Kading acknowledges that Bermuda companies continue to be profitable, while expenses remain their number one issue. They know the political uncertainty of Brexit and changes in the EU as well as the U.S. election present risks. Bermuda is looking ahead to its own election in early 2018. He is confident that companies will thrive by exhibiting competency in risk management and supporting markets around the world. He points out that Bermuda has an excellent regulatory environment for companies doing business in the U.S and/or EU.