Share on Facebook Share on Twitter Share on Google+ Share on Linkedin Brad Kading, President of the Association of Bermuda Insurers and Reinsurers (ABIR) spoke with WRIN.tv during the 2015 Global Insurance Forum in New York, about Solvency II equivalency and opportunities from new capital. The EU’s endorsement of insurance rules in seven countries, including the U.S., Switzerland and Bermuda , is very important for Bermuda. Mr. Kading says achieving equivalency because it means market access. Solvency II equivalency means that the Bermuda regulator will be recognized and cross-border trade collateral requirements will be waived. Mr. Kading says Bermuda hopes to get full equivalency by the end of this year. Mr. Kading sees the new capital entering the Bermuda market as an opportunity. New capital gives the private sector the ability to offer competing products against government offered programs. “Citizens, which used to be the largest property insurer in Florida, had shed 50% of its policies in three years…all because of the new capital coming in.” Mr. Kading believes there is opportunity for new capital to become involved in the National Flood Insurance Program (NFIP) as well. “Let the consumers decide which product they want… private sector or government.” New capital will also help expand the penetration of insurance products in the developing world. According to Mr. Kading, the G7 has endorsed the formation of public-private partnerships, where some insurance products will be funded by the government, with reinsurers providing liquidity. According to Kading “There is a new mindset in regards to new capital. With new capital, underwriters can look at products that in the past were less appealing, giving consumers opportunities for lower priced insurance coverage. He also sees new capital is already moving beyond reinsurance and into commercial markets – both liability and property. In closing, he says there is no such thing as “alternative capital” anymore…traditional capital and alternative capital have converged…It’s all capital that can take on risk.” It has fundamentally changed the reinsurance market, and it will change the commercial insurance market.” According to Mr. Kading, while some capital may leave after a major event, overall, new capital is here for the long term. For more of our coverage of the IIS Global Insurance Forum, visit the WRIN.tv On Demand Library.