Businesses everywhere are becoming more aware of cyberrisk, but finding insurance that offers meaningful protection has proven difficult and expensive. There are growing signs that the market is starting to find viable solutions and much of the innovation is happening here in Bermuda.

A leading example is Envelop Risk, which writes cyber reinsurance on behalf of MS Amlin, using its proprietary modelling and analytics tools. Bermuda was also home to the first cyber cat bond, sponsored last year by Lloyd’s insurer Beazley, with $45 million in notes listed on the Bermuda Stock Exchange. Everest Re is among the Bermuda reinsurers to have stepped up its cyber offerings and the Bermuda Monetary Authority has also reported an increase in the number of captives being used to provide self-insurance for cyber.

In this fast-growing and dynamic space, Mosaic Insurance is one of the most active and ambitious players. Its appetite for complex specialty risks and its embrace of high-tech underwriting tools makes cyber a natural fit for the 2021 Bermuda start-up.

The emergence of cyberrisk initially caught the insurance industry by surprise, with many traditional liability or property policies inadvertently providing “silent coverage” of cyber, while a lack of data made the pricing of cyberrisk riddled with uncertainty for underwriters.

Yosha DeLong, global head of cyber for Mosaic, said there was now a growing trove of data and loss experience supporting more informed cyber underwriting. “I think there’s sometimes an impression that we’re just throwing a dart at a dartboard,” she said. “But we have a lot of data underlying our pricing tools. We have data by country, by industry and for average ransoms. We can articulate the ultimate cost if a company is down for two weeks, if customers sue, or if it turns into a class action. All of that gets incorporated into the pricing tool.”

She cautioned that the cyberrisk landscape was forever shifting and insurers needed to be nimble. “The industry is getting to the point where we realise this isn’t a property or casualty tool you can use for months, or years. This is something that needs to be dynamic and changing all the time.”

Geopolitical uncertainty is one of the variables in the cyberrisk equation. Ms DeLong said the Russia-Ukraine war has had an impact. “We saw a fracturing of many of the ransomware gangs, because they had both Russian and Ukrainian members. That, paired with the recruitment of young men by the military in those countries, muffled ransomware activity for a while.

“The gangs that have been active tend to be smaller and less sophisticated. The frequency of attacks has started to pick up again, but overall ransomware activity in 2022 was well down compared to 2019–20.”

State-sponsored attacks present added challenges. Attributing them accurately is difficult, as the attacker sometimes masquerades as another country. The question over whether the attack is an act of war — thus invalidating most coverage — can then come into play. This is a topic of ongoing conversation in the industry, Ms DeLong said.

“We’ve been working closely with Lloyd’s to put together some comprehensive language around solutions we feel will both protect the industry from an accumulation or event, and also enable our customers to clearly understand where the coverage lines are drawn,” she said.

Multiple indicators point to strong growth ahead for cyber insurance. Cybersecurity Ventures projects that ransomware attacks will cost victims $265 billion annually by 2031, compared to about $20 billion in 2021. Munich Re estimates that only about 10 per cent of cyberrisks are insured, while a report by the Swiss Re Institute forecasts global cyber premium growth of 20 per cent annually to $23 billion by 2025.

Mosaic intends to grasp the growth opportunity. In March this year, Ms DeLong said the company will start to write primary cyber insurance to add to the excess-of-loss coverage it already offers out of underwriting hubs in Bermuda, London, Chicago, New York, Frankfurt and Dubai.

“We are very committed to this line of business and we have an aggressive growth goal to be a top-five carrier within the next five years,” she said. Mosaic’s cyber division is targeting $125 million in gross written premiums in 2023.

Mosaic’s structure is a differentiator. It takes the lead line of business its writes through its Lloyd’s Syndicate 1609 and syndicates the remaining risk globally. Mosaic describes this as a Syndicated Capital Management (SCM) strategy.

Mosaic launched its Bermuda cyber unit, headed by George Cole, in November 2021. It found an SCM partner in Everen Specialty Ltd (formerly known as Oil Casualty Insurance, Ltd) to support its cyber underwriting and hit the ground running. Mr Cole said: “We were fortunate to secure third-party capital through a partner on island at a time when it was very challenging for brokers to secure capacity. So, we came in at a great time when we were able to secure solutions for clients.”

Understanding an insured’s specific cyber exposures is key to evaluating the risk. Mosaic partners with California company Safe Security, leveraging its SAFE cyberrisk assessment platform. Mr Cole said clients have been doing a better job of bolstering their own cybersecurity in recent years, often driven by the standards required by their insurers, who have effectively become “pseudo regulators”.

Will capacity be there to meet future demand for cyber insurance? Ms DeLong believes investors are gaining confidence in the sector with greater availability of structured data.

Mr Cole added: “One of the biggest fears for investors coming into cyber is the aggregation of systemic risk and the challenges of modelling that. Loss ratios have reduced, partly due to sustainable pricing, but also because security standards have risen too, which has reduced the frequency and severity of events.

“I think the reinsurance market has got better at structuring some of their products as well. We seem to be moving away from a quota share market to an event, excess-of-loss structure, which can be more capital efficient. I think there’s been significant progress over this last 12 months that is enabling more capacity to come into the market.”

Bermuda will play a leading role in the future of Mosaic’s growing cyber business, Ms DeLong said. “The partnerships we have on the island are really important to us, on the reinsurance side, our SCM partners, and hopefully others in the near future.
We see Bermuda as an incubator of innovation in the cyber space and we feel this is going to be the place where we launch new solutions for our clients. So, Bermuda is a very important market for us.”

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by Jonathan Kent

The Bermuda Government’s express desire to boost the island’s working population by 8,400 over five years has been welcomed by many in business. But how can it be achieved?

It would be hard to dispute the rationale for expanding the workforce. Government projections indicate that nearly a quarter of the population will be seniors by 2026, while the working-age population (25-64) will fall.

Bermuda’s dependency ratio — defined as the number of people aged 65 and over per 100 people of working age, will rise to 43.6, up from 28 in 2017. The fall in the number of people paying into the system at a time when those drawing from it are increasing in number is already putting strain on pensions and social services, and applying upward pressure on health insurance premiums.

With more Bermudians retiring from the workforce than young people coming into it in coming years, more from outside will be needed just to maintain the current level of full-time jobs. It would seem very clear that the vision of net growth of 1,600 jobs per year — in an economy which has lost an annual average of 684 jobs since 2008 — will require a clear, defined strategy and bold actions.

Considerations may include:

Coordinated effort
Government cannot create the jobs on its own. It will need buy-in from businesses, the confidence of investors and the understanding of the community in making the necessary bold policy decisions that have previously proved politically unpalatable.
A task force that brings together public and private sectors, as suggested recently by Butterfield Bank executive Michael Neff, would help to make it a “Team Bermuda” effort. Meeting regularly, it could also monitor progress, suggest useful actions and maintain forward momentum.

Incentives for businesses
Labour is like every other discretionary economic choice — the more expensive it is, the less people will buy. The Government influences the hiring equation, especially through the rate of payroll tax, a direct tax on employment that constitutes about 42 per cent of government revenue.
The long-discussed broadening of the tax base could relieve the payroll tax dependence and incentivise hiring. Attracting new businesses and investment at the scale envisaged will also require new incentives to enable Bermuda to compete with rival jurisdictions such as the Cayman Islands, in areas such as taxes, work permits and residency rights.

Housing plan
Whether returning Bermudians or expatriates, the new workers will need places to live. Recruiters and realtors are already highlighting a shortage of rental inventory of the kind of family homes and city apartments sought after by job-creating executives and incoming workers.
Incentives for owners to restore dilapidated, disused properties and for investors to develop apartment buildings in Hamilton may help. A national housing plan incorporating the implications of an influx of new residents and the changing housing needs of the ageing population, while building in sustainability parameters, could set clear targets for developers to act upon.

Aligning immigration policy with population growth target
Bermuda must compete with the rest of the world in an intense war for talent. Access to talent is a key driver of job creation and economic growth. Given that the island’s small population means it cannot hope to produce the numbers of skilled and qualified people it needs in many fields, an efficient immigration system is the conduit to talent needed by local and international companies alike.
Expat workers’ value to the economy has long been clear. They pay taxes to support government services, expand the health insurance pool and create demand for products and services. An increase in expat workers on island creates an economic virtuous circle, through greater demand in the local economy, boosting local businesses and supporting jobs growth across all sectors.
When they leave, the reverse happens. Bermuda lost a total of 8,897 jobs between 2008 and 2021. The zero-sum logic that assumes that Bermudians have more jobs for themselves when expats leave does not bear up to empirical scrutiny. For every expat job that disappeared over those 13 years, 1.27 Bermudian jobs were lost, according to data from Employment Briefs surveys.
The BermudaFirst Report of 2019 produced a practical gameplan for immigration reform, tailored to Bermuda’s sensitivities and economic needs, by taking steps including:

• Aligning Government’s goals with immigration policies
• Shifting the mindset of the Immigration Department so that it recognises the needs of businesses
• Resolving the issues associated with family and long-term residency
• Adopting a workforce approach with companies that includes understanding their business model, organisational talent needs, expectations for Bermudian inclusion and accountability milestones for meeting Bermudianisation agreements in exchange for issuing all work permits required by such companies
• Automating and streamlining the immigration process overall.

The Bermuda Government’s own position paper states: “Bermuda is facing a demographic crisis that requires strong, decisive leadership and urgent action to be taken.” Indeed — there is no time to waste.

The post How can we boost the working population by 25%? appeared first on RG Magazines.

by Tim Smith

For executives at the sharp end of Bermuda’s international business community, private jets are more than just a luxurious way to travel.
The ability to quickly attend meetings overseas at short notice – without wasting time sitting in lounges and navigating the mayhem around commercial airports – makes private air travel a simple business decision, according to James Mulderig of the Private Jet Club.
“Say you’re an insurance executive and you have a meeting with a company you’re trying to insure in some small town in South Carolina,” said Mr Mulderig, the VP of charters at the club.
“With Bermuda’s commercial travel, that’s going to be a problem. You’re going to have a couple of connections, you might have to drive, you’re going to spend all day doing that.
“Versus we are going to put you on a plane and land you at an airport right next to your meeting. After your meeting you get on your plane and fly back here in one day.
“Once you start taking into account the amount that the company values ten hours of five executives’ time at, if we can save them those ten hours and have them in meetings instead of sitting around in Kennedy or Charlotte, all of a sudden it makes huge economic sense for the companies.”
It’s understood more than 500 private jets arrive and depart in a typical year from Cedar Aviation Services, the fixed-base operator at LF Wade International Airport.
The Private Jet Club launched last October to try to make private air travel more efficient and less expensive by creating a network of travellers who can share flights. It already has more than 40 members who visit business destinations such as Boston and New York, second homes in Florida or Vermont and skiing resorts.
Private Jet Club director Robert Mulderig said private jet services play a crucial role in sealing Bermuda’s reputation as an elite offshore business centre.
“The availability of air transportation, including private air transportation, is extremely important to building a world-class jurisdiction,” he said.
“Being able to get there easily, being able to visit and get back in one day, is very important in selecting a jurisdiction.
“Bermuda has very good service for private jets. If a businessman in Boston just decides he needs to go to a meeting in Bermuda, he speaks to a broker, and they will arrange a flight for him.”
Director David Ezekiel said a major part of the Private Jet Club’s business plan is to make life easier by taking care of booking flights and handling negotiations.
“You can arrive 15 minutes before your flight,” he said.
“The staff at the private air terminal have things down pat. The pilots are usually there to walk you to the plane and you’re on. At the other end, we arrange private transport if that’s requested.”
He added: “Quite often, an airplane will come here with a passenger but will leave empty.
“We track all the empty legs. Empty legs are typically much cheaper because the operator has a plane that’s going to earn nothing.”
Cedar Aviation would not reveal the exact number of private jets that come to Bermuda, but noted activity is increasing after a predictable lull during the Covid-19 pandemic.
Managing director Anthony Richardson also pointed to a growing trend towards private air travel for leisure.
“We have been pleasantly surprised to see that activity in the latter part of 2022 seems to be returning to pre-Covid levels,” he said.
“We have also noted a trend for increased leisure travel. Pre-Covid, the majority of visitors were business travellers. Post-Covid, it appears that leisure travel is exceeding business travel as families accept that the increased cost of executive jet travel compensates for the improved convenience and flexibility of executive travel.”
One reason for this, according to the Private Jet Club, is simply that people love their pets – and travelling with animals in the cabin has become more difficult on commercial airlines.
“Half of the flights we’ve done for individual members is people taking their pets away. There’s a huge call for people to do that,” said Becky Ezekiel, VP of operations.
“People get in touch saying, ‘Can you guarantee I can take my dog on this trip?’

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Brianna Buchanan never wanted a stagnant career. The 28-year-old audit manager in KPMG’s Bermuda office, is dedicated, ambitious and excited for what the future holds. But she doesn’t sugarcoat it. Passing the Chartered Professional Accountant (CPA) exams is challenging. However, she strongly believes the effort is worth it, especially in Bermuda where financial services are such a dominant part of the economy.

Ms Buchanan has a US CPA, but KPMG also offers support for the UK ACA, UK ACCA and Canadian CPA. Which one you choose will often depend on where you went to university, however the requirements and process for each differs.

At a minimum, you need a bachelor’s degree to pursue the CPA, but the US has a credit requirement of 150, so students will often need a masters’ degree to meet that.

For the US, you also need to pick a state to register with, as each one has a different licensing body. Ms Buchanan, who is a dual American and Bermudian citizen, picked California, where she was born.

While you can study in Bermuda for the US programme, you have to fly there to sit the four exams. The UK and Canadian programmes on the other hand are much more flexible.

“You wouldn’t have to take additional university credits. They’ll have courses built into the programme,” she explains. “Your programme will be more tailored to where your education level is.” You can also sit the exams from Bermuda.

On the flip side however, this tailor-made approach takes longer. At a minimum, the CPA process will take 18 months for the US programme, but around two to three years for the UK or Canadian one.

While you don’t need to be working at an accountancy firm to achieve your CPA – Ms Buchanan took her first set of exams while still at university – she says that getting into one of the ‘big four’ accountancy firms’ graduate trainee programmes will give you the best start and support. The big four are KPMG, PwC, EY and Deloitte.

“All the big four offer a graduate trainee programme where we’ll take students with no experience straight out of university, bring them on board, give them the baseline training and work experience you need as an upcoming CPA,” she explains. “We also give them paid study leave so they can work and take time off to finish those examinations to become qualified.”

Each student entering KPMG’s programme is also assigned a career coach, education mentor and managing director mentor.

A common misconception about accountancy is that it’s boring and often, when Ms Buchanan speaks to young people about her job, they just think of bookkeeping.

“My job is far from boring,” she says. “I’m interacting with the board of directors and CFOs for these multi-million-dollar firms on a daily basis. I’m auditing complex investments. I get to travel for my client. I think it’s a very rewarding career path.”

As a manager with five years’ experience in the firm, she is also a mentor, manages a team and plans and manages audits.

Ms Buchanan is particularly motivated by the global mobility available in her chosen career. “We’re everywhere,” she says. “I know people who have started in Bermuda and then gone to Australia. They’ve gone to the UK. I think the opportunities are endless in a big four international company like KPMG.”

Working for a big accountancy firm, however, can be intense, but once you have your CPA, you have earned skills that are transferrable to so many other career paths.

“Once people leave here, they tend to become reinsurance accountants, fund controllers or CFOs. It’s a broad array,” she says, adding that there are also great opportunities by staying within the firm as students can experience management consulting, internal audit, IT advisory, tax and audit. “A student is bound to find an avenue that best suits them,” she says.

To be a successful accountant, says Ms Buchanan, requires discipline and self-motivation: “You have to be able to push yourself. I think you have to be very goal-oriented to thrive in this type of environment.” If you can do that, she adds, “the opportunities are endless”.

The post How to become an accountant appeared first on RG Magazines.

by Jonathan Kent

David Burt, the Premier and Minister of Finance, will deliver the Bermuda Government’s Budget Statement on February 17, with potentially significant tax implications for businesses of all sizes.

December’s Pre-Budget Report set out significant payroll tax reforms that, if implemented, would bring relief to lower earners and small businesses at the expense of higher earners and exempt companies.

The employee portion of payroll tax would be eliminated for those earning up to $48,000 a year. For the three bands above $48,000, the rate would rise, with the heftiest increases on earnings above $235,000, which will attract a 13 per cent levy, up from the current 9.5 per cent. In addition, the Government has suggested lifting the cap on payroll tax from $900,000 to $1 million.

On the employer side, businesses with a payroll of less than $200,000 would pay zero. Exempt companies would be subject to a higher rate of 10.75 per cent than others with payrolls of more than $1 million, who would pay 10.5 per cent under the proposals.

The report is a consultation document and the Government has been gathering feedback on its plans ahead of the Budget.

John Huff, chief executive officer of the Association of Bermuda Insurers and Reinsurers, said the proposals could “could deter international companies from continuing to invest in Bermuda and retaining employees on island”.

This warning shot fired by a leading voice in the international business engine room of the Bermuda economy makes clear the risk with the Government’s heavy reliance on taxing employment, and applying high rates to decision makers and job creators.

This comes at a potentially pivotal time for tax policy. The Ministry of Finance has formed an international tax working group to assess the implications and opportunities arising from the potential implementation of the global minimum tax. And there are also plans to reconvene the Tax Reform Commission to continue its work of planning a more progressive and broader tax system.

***

“Innovation, sustainability and collaboration” is the theme of the second annual Bermuda Risk Summit, presented by the Bermuda Business Development Agency in partnership with the Association of Bermuda Insurers and Reinsurers and EY, to be held on March 6 to 8 at the Hamilton Princess Hotel.

A broad range of topics is on the agenda, as the theme would suggest. Panels will tackle subjects including regulation, the evolution of partner capital, Florida’s disparate litigation levels, investor experiences of Bermuda, global financing conditions, the future of cyber reinsurance, casualty lines, specialty lines and innovative technology.

Speakers include David Burt, the Premier, and industry luminaries including Stephen Catlin, executive chairman of Convex; Megan Thomas, CEO of Hamilton Re and Christopher Schaper, CEO of AIG Re, as well as international regulators, investors and rating agencies.

Insurance is a growth leader in Bermuda’s economy and has come through the pandemic stronger. Opportunities and challenges ahead include closing the yawning protection gaps in climate and cyber risks. The event should be quite a draw, based on the experience of last year’s inaugural summit, which attracted 350 delegates, including 80 from overseas.

The post All business eyes on the Budget appeared first on RG Magazines.

Landlords are offering incentives such as rental holidays as they grapple with a glut of vacant office space in Hamilton.
Penny MacIntyre, of Rego Sotheby’s International Realty, said upgrades are also being made on non-prime properties which have been overlooked while business tenants opt for glamorous waterfront locations.
Brian Madeiros, of Coldwell Banker Bermuda Realty, meanwhile, said some vacant properties are ripe to be converted into homes for overseas workers – as long as the Government’s policies line up with such a move.

Ms MacIntyre said Class A+ and A properties such as Point House on Front Street and Waterloo House on Pitts Bay Road are in high demand because of their waterfront views, modern interiors and top-class amenities.
There is less interest, however, in the city’s older buildings, including those on Reid Street, Church Street, Victoria Street and side streets, which have mainly cityscape views, dated interiors and a shortage of natural light.
“Prospective tenants include both new-to-Bermuda and businesses with existing local offices looking to relocate, resize or upgrade their offices,” Ms MacIntyre said.
“These prospects tend to look for newer interiors and spaces that require less reconfiguration or easy to adjust layouts for today’s ‘right-to-light’ seating plan where international companies especially seek to place meeting rooms to the interior and employee seating and meeting rooms on the periphery to have access to more direct natural light.”
She added that some tenants of older buildings have terminated their leases since the Covid-19 pandemic, as firms have amalgamated or closed operations, while employees have switched to remote working.
Ms MacIntyre said: “The growing vacancy and the lengthening times non-prime properties sit on the market are resulting in landlords’ willingness to consider either free rent periods, potentially reduce rent during renovation periods or contribute to or install interior improvements such as new carpeting, LED lights, fresh paint and some cosmetic updates such as bathrooms or kitchenettes.”
Mr Madeiros noted the “flight to quality” in recent years means Class A office space is now practically fully let.
He said: “In Bermuda, because a lot of our office space is actually dated, we find that when there is a new development, purely because of the nature of our international business, it attracts a lot of attention. We have excess demand of this lovely, high-quality space.”

But he said there are challenges finding tenants for an estimated 300,000 square feet of vacant secondary office in Hamilton.
“One might say, what do landlords need to do in order to fill that accommodation?” Mr Madeiros asked.
“No landlord is going to invest money into an older building if they don’t feel there’s demand for refurbished secondary. Landlords need to understand who their end user is if there is one.
“So that speaks to the Government’s strategy to increase our working population. If we do, then we might see landlords with a risk mitigation strategy around refurbishment feel more comfortable refurbishing or redeveloping these buildings.”
Mr Madeiros said there may be interest in creating developments comprising retail, office space and residential accommodation.
“With this hybrid, the developer needs to have some form of comfort that they can either rent or sell pieces of this development as residential or commercial condominiums in order to make their financial model work,” he said.
“The problem is if we are going to be increasing our working population with work permit holders, we’ve had a number of instances where they’ve said we can’t find rental accommodation, we would like to commit and buy a condo, high-end, and we want to be in the city.”
Mr Madeiros noted work permit holders cannot purchase high-end condos in the city.
“This is a risk to any developer who flies into Bermuda,” he said.
“These individuals would love to live in the city but they can’t, so you don’t have that market to sell to.
“I think the policy makers have some further exploration to do around this area.”
Ms MacIntyre said that developers have been considering the merits of changing a handful of office buildings into residential or mixed use with office, residential and retail occupants.
Such moves are subject to planning approval – but could potentially help rejuvenate Hamilton.
“Bermuda is certainly in need of more residential rental inventory,” she said. Residential construction in Hamilton could help to bring more people to restaurants and bars that have suffered from the impact of remote work, she added.

The post Developers search for solution to Hamilton’s vacant offices appeared first on RG Magazines.

Pina Albo has been appointed chair of the Association of Bermuda Insurers and Reinsurers, succeeding Marc Grandisson. Ms Albo is CEO of Hamilton Insurance Group and the first female chair in ABIR’s 30-year history.

Albert Benchimol, president and CEO of Axis Capital, will step down from this role on May 4 and retire at the end of 2023. Mr Benchimol will be succeeded by Vincent Tizzio, who currently serves as CEO, Specialty Insurance and Reinsurance.

John Hendrickson has been appointed CEO of Concert Group, succeeding Jonathan Reiss who had been CEO since Concert’s inception in 2021.

Abayomi Carmichael has been promoted to CEO of the Regulatory Authority. He was previously the organisation’s senior manager for energy.

Jon Burull has become president and chief executive officer of Watlington Waterworks. Formerly the company’s COO, Mr Burull succeeds Allan Rance who retired at the end of 2022. Karlene Barrow-Kelly has been promoted to COO.

Geoff Scott has been appointed CEO of the Bermuda Bankers Association, replacing Thomas O’Rourke. Mr Scott has worked in the financial services industry for over 30 years.

Claire van Overdijk, counsel at Carey Olsen, has been appointed King’s Counsel (KC) and will be sworn in, in March.

Christine Patton has been appointed executive director of Bermuda International Long-Term Insurers and Reinsurers and former finance minister, Curtis Dickinson, has joined the organisation as executive adviser.

Kendaree Burgess will become COO of the Bermuda Business Development Agency on March 6. She is currently CEO of the Bermuda Chamber of Commerce.

Marcello Ausenda has been promoted to head of Bermuda corporate practice at Conyers, taking over from Charles Collis who continues as head of the Bermuda insurance and reinsurance practice.

Peter Skerlj has joined Vantage Group as chief risk officer. He was previously chief risk officer at Hamilton Insurance.

Paul Simons has been appointed deputy chief executive officer of Convex Re, joining from Axa XL where he was most recently CEO of Bermuda Reinsurance. Convex Re has also promoted Richard Slater to chief underwriting officer.

Robert Foskey will succeed George Hutchings as chief operating officer of Everen in April. He currently serves as the company’s chief actuary. Mr Hutchings will retire at the end of 2023.

Keith Jernigan has joined ReGen Group as director of operations. He has had a 20-year career at multiple security and service companies in the US, Cayman Islands and Bermuda.

Chris Lee has been appointed COO of Aspen Capital Markets, the alternative reinsurance arm of Aspen Capital Partners, joining from Hiscox Re & ILS where he was also COO.

Tonia Morgan has been promoted to CFO, reinsurance Bermuda at Axa XL. She was most recently head of finance reinsurance and alternative capital.

Justin O’Keefe and Fiona Walden have been promoted to chief underwriting officer, North America and Bermuda, and chief underwriting officer, Casualty & Specialty, respectively at RenaissanceRe.

Brian Espie has joined reinsurance MGA start-up Kettle as chief underwriting officer. He was previously group head of North American reinsurance at Fidelis.

Christopher Moulder has joined the Privacy Commissioner’s office as assistant commissioner for investigations. He previously worked with the government’s Labour Relations department.

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Natalie Chiaramonte has been appointed president of Sovereign Risk Insurance Ltd, succeeding Price Lowenstein, who is planning to retire from the company. Ms Chiaramonte was previously senior vice-president and chief operating officer of Sovereign.

Following the completion of Covéa’s purchase of PartnerRe from Exor, Thierry Derez, CEO of Covéa Group, will replace Brian Dowd as chairman of the company’s board of directors. Mr Dowd will remain on the board as an independent director. Jacques Bonneau, PartnerRe president and CEO, will also remain on the board.

Paul Brand has become chief executive officer of the Convex Group. He founded the business in 2019 with Stephen Catlin and had been deputy CEO.

Paul O’Shea, president of Enstar Group Ltd, is to retire next March after 28 years at the company. He will remain a member of the board of directors. David Ni, M&A EVP and chief strategy officer will lead the company’s M&A activity going forward.

Thomas Bradley has become CEO of Argo Group International Holdings, replacing Kevin Rehnberg, who has been on leave for health reasons. Mr Bradley has been Argo’s chairman since 2020 and has served as interim CEO since March.

Amy Ellison, chief executive officer of Legal & General Reinsurance (Bermuda), Manfred Maske, group CEO and board member of Monument Re Group (Bermuda), Michelle Moloney, chief risk officer of Pacific Life Re, Donna Cotter, CEO of Sun Life International, and Jon Steffen, president of Aspida Life Re, have all been elected to the Biltir board of directors, increasing the total number on the board from 10 to 15.

Megan Green has been promoted to partner at PwC Bermuda. She joined the firm in 2017 as a director in the asset and wealth management practice after starting her career in Australia.

Kyle Masters, Sam Stevens and Jay Webster have all been promoted to the group partnership and Michelle Falcucci has been promoted to counsel at law firm Carey Olsen Bermuda Ltd.

Marlene Cechini has been appointed chief financial officer of Everen Group, formerly known as Oil Insurance Ltd, succeeding Ricky Lines who takes up the newly created position of chief investment officer. Ms Cechini was previously vice-president of finance.

Peter Kiernan has joined Axa XL Reinsurance as head of US Property, Bermuda reinsurance. He will be responsible for the US property strategy and execution of business underwritten through Axa XL’s Reinsurance Bermuda operation.

David Rocke has been appointed group head of M&A at RiverStone International. Jamie Saunders, who joined RiverStone in March, has been appointed chief underwriting officer, reporting to Mr Rocke.

David Ross has joined Envelop Risk to establish a Cyber ILS offering based out of Bermuda. He has previously been lead underwriter at Bernina Re and head of deal analytics at Nephila.

John Duda has joined Miller Bermuda as head of ILS development and capital management products. He joins from Markel where he led the retrocessional portfolio management team.

Brian Tedeschi has joined Ascot Re Bermuda as a casualty reinsurance underwriter. He was previously a reinsurance broker at Lockton Re.

The post Movers and shakers appeared first on RG Magazines.

by Jonathan Kent

Significant business developments that made the news in recent months:

It’s been a lively period for the banking sector. In June, the Bermuda Monetary Authority granted the first new full banking licence in 21 years to Jewel Bank, which also received a digital asset business licence. Jewel’s focus is to service the core banking, payments, and settlement needs of digital asset firms and exchanges, those based in Bermuda and overseas. The news is significant because it means that the 15 licensed firms in Bermuda’s growing digital asset sector will for the first time be able to access banking services on the island, as established local banks have so far shied away from their business.
In July, Premier David Burt ruffled a few feathers when he lambasted the local banks for extravagant fee increases. Some local banking fees had risen by 400 per cent, he claimed. Mr Burt launched the broadside on banks in the House of Assembly, as he introduced the Banks and Deposit Companies Amendment Act 2022 to provide the Bermuda Monetary Authority the power to impose codes of conduct on deposit-taking institutions. He added that if banks don’t take action to curb their fees, the Government will.

The economy is a mixed bag. The underlying trends of slumping retail sales and rising inflation would appear to point towards recession. Government figures showed retailers took less at the till for nine consecutive months up to March this year, although there was a strong rebound in April. The official inflation rate, as measured by the Consumer Price Index was measured at 3.5 per cent in April, a ten-year high. However, reported comments from businesspeople such as Zach Moniz of Lindo’s Group (who said food inflation is about 8 per cent) and Penny MacIntyre of Rego Sotheby’s International Realty (who put rent increases at between 10 and 30 per cent over the past year) suggest the cost of living has climbed more sharply in the months since then.
On the bright side, the return of leisure and business visitors, by air and by ship, have inspired a rebound for hospitality, and tourism-related retail and services. Staff shortages at busy, but pandemic-diminished restaurants are now limiting the business they are able to handle, according to Phil Barnett of Island Restaurant Group. Also, retail sales data show a continuing upward trend in building materials sales, a sign that the construction industry remains buoyant, partly from demand for home modification from those continuing to work from home.

Evidence came to light that the soaring cost of healthcare is having an outsize impact on small businesses. A Bermuda Health Council report stated that companies with ten of fewer employees were the majority of businesses reported monthly by insurance companies as non-compliant in 2021. The report adds: “Small businesses state that they struggle to afford their monthly health insurance premium.” Hardly surprising, given that the standard premium rate, the basis for the minimal requirements of a health insurance plan, rocketed by 12.7 per cent last November.
In total, 463 employer policies were reported by insurers as inactive or terminated in 2021. There were 2,397 employees affected — the positive aspect was that this represented a 4 per cent decrease from pandemic-ravaged 2020.

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Central banks are responding to high inflation by raising interest rates. While this time-honoured tactic is designed to cool overheating demand, the risk is that it will tip economies into recession.

But even while borrowers are suffering from the US Federal Reserve’s series of rate hikes that have led to higher loan and mortgage repayments, there is a bright side for the Bermuda.

That stems from a potential increase in profitability for the island’s flagship international re/insurance industry and the knock-on effect for the domestic economy, according to economist Peter Everson.

In the 14 years since the collapse of investment bank Lehman Brothers sparked a near meltdown of the global financial system, lower-than-normal interest rates have been the norm, squeezing the yield re/insurers can make from investing their vast pools of collected premiums. Each rate increase brings opportunities for an increase in investment income.

Mr Everson, of PEConsultants, a past president of the Bermuda Chamber of Commerce, said: “Rising interest rates, if they stay higher, will be a boon to the local economy.”

He referred to the period in the run-up to the Global Financial Crisis of 2008. A long series of incremental interest rate increases between the fall of 2004 and mid-2006 took the influential US Fed Funds Rate from 0.25 per cent to 5.25 per cent, a level where it stayed for more than a year. In comparison, now the rate is in the range of 1.5 to 1.75 per cent after the June rate increase, with multiple more increases expected in the coming months.

“Recall, say 2005 to 2007, when the restaurants on Bermudiana Road had full houses and high prices, largely based on re/insurance industry expense accounts,” Mr Everson said. “The wait staff, both Bermudian and expats, also participated through the gratuities.

“What changed? Interest rates declined and with it, the ability of the re/insurers to make ‘safe money’ on government bonds. With income declining, expenses came under review.

“With a lag of a couple of years, the chief financial officers banned all expense chits unless there was a client at the table. So all the ‘departmental’ lunches went away as did ‘networking’ lunches.

“Then came headcount reductions. Then came outsourcing outside of Bermuda. Then came mergers and takeovers. Then rinse and repeat. So higher interest rates make the re/insurers more profitable and that directly benefits Bermuda.”

If interest rates continue to climb, Mr Everson expects employment numbers to rise, expanding the island’s labour force. “That will help everyone, including the Government,” Mr Everson added. “Specifically, if the employment increases are at the higher end, then rental income will increase, plus schooling, groceries, etc.”

Tourism would also enjoy a boost, he added, helped by an increase in the number of young international business employees with a high propensity for business and leisure travel, who would fill more inbound and outbound plane seats. As well as attracting family and friends to the island, their presence would also increase business visitor numbers.

“More demand begets more service, which begets more flights, which begets more visitors,” Mr Everson said.

The gains for the Bermuda economy will offset some of the pain to be endured by borrowers, including the Government, as rates creep higher. Each time the Government rolls over a portion of its debt in the coming year or two, it is likely to refinance at a higher interest rate level. But there is a bright side, in the long term at least.

As Mr Everson explained: “If inflation is high and remains high then mortgages and debt become cheaper to repay, because you pay them off with inflated dollars.”

Inflation disproportionately impacts those on low and fixed incomes. Asked what could be done to protect the worst-affected, Mr Everson suggested several ways that the Government could help with the essentials, such as:

• Electricity bills: 50 per cent rebate paid to Belco by Government for specified customers for a limited number of kilowatt hours
• Health services: Government pays for four doctor’s visits per year to enable general preventative care and pays for mental health services, which are more in demand when economic hardship leads to greater stress
• Food costs: Government could give grocery stores short-term payroll tax exemptions or Belco bill rebates in return for keeping prices down.

Mr Everson sees education as the long-term answer to Bermuda’s cost-of-living problem. “There are more than enough well-paid jobs in Bermuda for all Bermudians seeking work — the mismatch is in skills and education,” he said.

“I am not saying the everyone should be a doctor or lawyer. We have plenty of butcher positions filled by expats. The public education system has been underperforming for more than 30 years and until that changes then Government will always be applying Band-Aids.”

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