Bermuda has emerged as a leader in the global ILS market only four years after implementing a specific regulatory framework to facilitate the formation of such instruments through a new licence class for insurers.
In 2009, the Bermuda Monetary Authority (BMA) introduced the concept of a Special Purpose Insurer (SPI) – the insurance vehicle of choice for ILS transactions. Bermuda’s regulatory and supervisory framework also provides for the creation of sidecars, Industry Loss Warranties (ILWs), and collateralised reinsurance vehicles.
The ILS market has benefitted from a large investor base and the existing (re)insurance expertise in Bermuda. As we can see Bermuda is well placed to be the jurisdiction of choice for ILS, however we must consider what Bermuda can do as a jurisdiction to improve and/or complement the existing ILS market in order to retain our top spot for the foreseeable future.
What follows are only suggestions about possible ways forward and in no way purports to be an exhaustive, conclusive or entirely feasible list of possibilities on how to keep Bermuda as numero uno. The goal of this article is however, to trigger thought and perhaps dialogue about how Bermuda can retain its reputation as a leading ILS jurisdiction while also increasing our market share in other areas as a result of ILS connections.