“We think of ourselves as unique, from the restructuring point of view, and the way we work with the Bermuda Monetary Authority,” says Brad Adderley, re/insurance law partner at Appleby in Bermuda.
Adderley is keen for the Bermuda Monetary Authority (BMA), to help the island keep its position in the global industry and he is also part of a new breed looking outside the box to make sure it stays that way.
The firm is an offshore law specialist with around 470 people, including 60 partners, operating from 10 offices around the globe; the largest being its Bermuda base.
The other locations for the firm’s offices include the British Virgin Islands, Seychelles, Cayman Islands, Guernsey, Hong Kong, Isle of Man, Jersey, Mauritius and Shanghai.
Offshore law and the jurisdictions it oversees has had a battering in recent years and there is now a focus on working closely with regulators to ensure that the reputations of everyone involved are built on trust and compliance.
“From a Bermudian point of view, as the world’s third largest re/insurance jurisdiction, most of the insurance world touches Bermuda,” Adderley explains, and he is keen to help it stay in the game.
The Bermudian government wants to shore up the island’s position as one of the leading global re/insurance domiciles and embrace the changing digital world. As part of this, the island’s government is keen to develop digital incubators, attract cyber security centres, and adopt an e-ID similar to a programme already established in Estonia.
Bermuda’s culture and resources are a boon to this, says Adderley, who believes that the island’s unique history of involvement with insurance have given it a workforce of people who have the know how to revolutionise their insurance practices.
Adderley is also keen to see the captive market on the island maintain its current status. “We’re the largest captives domicile in the world,” he states. At the same time, he wants Bermuda to remain the pre-eminent insurance linked securities (ILS) and catastrophe bond domicile in the world.
Essentially, Bermuda should have as many of its fingers in as many pies as possible so it can serve the industry as a true ‘one stop shop’ for everything related to the insurance industry.
“Bermuda is becoming more important; its life sector is also growing when previously we were only known for P&C. It’s become a hub for so many different specialities,” said Adderley.
The Appleby partner does recognize that the market has its issues though.
There are “new players in the works creating ILS platforms”, Adderley said referring to emerging ILS hubs such as London and Singapore.
Compliance remains a core issue for carriers on the island though, and one that is obviously central to Appleby’s operations, as well as those of the wider industry on the island.
The hard work being undertaken by the BMA to ensure that Bermuda is compliant with regulatory frameworks such as Solvency II in the European Union is something that the industry appreciates. In fact, Adderley said the BMA’s activities actually help attract re/insurance industry businesses to the island.
“We are getting interest in Bermuda because of the BMA and not in spite of it,” Adderley said.
“Everyone used to do everything they could not to be regulated, but clients say they have to be regulated. And it’s good that it’s regulated, but it has to be the right regulation,” he says, adding that while other jurisdictions do not have such stringent regulation, that may ultimately be to their detriment in the long term.
Adderley says this is important as the BMA is creating a jurisdiction that is the envy of others around the world, leaving others on the outside looking in. But developing such a regulatory platform has not been straightforward.
“Getting Solvency II equivalence took years,” Adderley said, adding: “But it came about because carriers and the BMA worked together.”
“It’s going to bring more businesses together,” he says. “Especially around the advent of initial coin offerings (ICOs), blockchain and the rise in crypto currencies. It’s going to help the insurance market go forward, and help transform both sides of the coin.”