Bermuda has been at the heart of the captive insurance and reinsurance space for decades and is now emerging as the leading market for this area. Home to a range of insurers and reinsurers, we spoke to Patrick McAleer, Director, International Actuarial at Emerald Group, to discuss the latest trends in this reinsurance market, including the race for actuarial talent.
The strength of Bermuda’s reinsurance landscape is behind the recent trend of new reinsurers relocating to Bermuda. Demand from companies and market needs have continued to grow and the country, economy and insurance regulator have committed to meeting this demand. Patrick explains how this is impacting global competition for actuarial talents.
“Although other markets have appeared and grown during the last few years, Bermuda is still at the forefront of the risk space within the insurance and reinsurance world. Companies have partly set up here for tax purposes, and this, combined with a supply of actuaries, underwriters and seasoned insurance professionals, makes Bermuda a priority location for new companies opening up in this space. At Emerald Group, our engagement with reinsurers and their employees confirms that Bermuda is where they want and need to be within the insurance world.”
An Expanding Market
Bermuda has always been a huge property and casualty market, and the largest supplier of catastrophe reinsurance to US insurers. Further insights from Patrick indicate how this market is continually expanding, “The areas covered by this market have continued to grow. Many reinsurers have branched into alternative risk transfer offerings, insurance linked solutions and catastrophe bonds. There has also been a tremendous increase in the number of life reinsurers and captives established in Bermuda. Previously this was a very small market on the island, but a number of life insurers have set up reinsurance operations and we’ve also seen completely new life reinsurance companies emerge. At Emerald Group, we’re seeing first-hand how this is creating employment and relocation opportunities, as companies create and build local teams.”
Why Bermuda?
Within an established global trend of offshore locations for reinsurance companies, we asked Patrick why Bermuda is so appealing for the financial sector.
“The recent trend of new reinsurers opening in Bermuda is due to local laws. These allow businesses that work with US insurance clients to operate under a streamlined set of regulatory requirements, without additional capital or regulatory collateral requirements. This, combined with the tax incentive of being based in Bermuda, gives companies a lot more flexibility.”
He continues, “The market has seen a huge growth in run-off acquisition firms. Established and new reinsurers are looking to grow through the purchase of closed book portfolios, available where insurance companies are selling off portfolios and improving their solvency ratio. Acquisition firms see this as a great opportunity to increase value and grow quickly. This has drawn attention in the market and has been recognised for the financial opportunity it creates. In turn, this has led to more firms entering this field, driving growth in the market and creating employment.”
The Employment Pool
With so much business underwritten and priced from Bermuda and all deal work legally having to be done from Bermuda, there is a large actuarial pool on island. Opportunities include in-house and consultancy roles, as Patrick explains, “Emerald Group is working with an ever-growing number of companies with a constant demand for actuaries, either working in-house or for consultancies who act as responsible actuaries or help set up operations. We’re seeing greater demand for auditors and actuarial consulting work.”
There are some clear benefits to local employment in terms of role responsibility and development. Patrick continues, “Actuaries in Bermuda typically gain broad exposure to a variety of responsibilities early on in their career. Companies are quite lean in Bermuda because of hiring costs and immigration approvals for new hires, which means that actuaries and other insurance professionals gain exposure to a range of areas. For many actuaries, their careers grow at a faster pace in Bermuda than they would in other markets and they are well compensated by their employer.”
Emerging Opportunities
With a vibrant employee base in place in the country, why does this market need a flow of new actuaries? Patrick clarifies why Emerald Group has a steady feed of new roles for this market, “Despite the large number of actuaries already working in Bermuda, many are happy in their current roles, where they have great opportunities and are well compensated. Employers have protection for two years when someone moves to Bermuda and employees’ work permits are tied to that employer during this period, so movement in the market is initially low, as employees meet their visa requirements. With companies continuing to grow and new companies opening, there are always new positions in the market. In addition, our clients often want to fill roles quickly: our network of candidates includes contacts who are perfectly suited to these roles and prefer to find opportunities through their network rather than job boards, so we fill our clients’ needs by opening up our searches to a broad range of potential candidates.”
“On top of this, international recognition of qualifications and companies operating in different markets means actuaries can gain exposure to different regulatory systems. This means clients are flexible about where actuaries come from and know that the candidates we put forward have the experience that means they will make an impact quickly.”
What Does the Future Hold for Bermuda?
With continuing commitment to the reinsurance market, Bermuda is likely to continue to need actuaries. Patrick explains what that means in terms of employment opportunities. “Bermuda is likely to need actuaries willing to relocate to the island for the foreseeable future. Legal employment requirements and a supply of actuaries wanting the life and career experience of living and working in Bermuda is likely to keep this market skilled and buoyant. I expect the trend of relocation to carry on, with more roles continuing to open. This, combined with new reinsurers and captives setting up all the time, further strengthens the need for relocation into this market to continue.”
Have you considered a career move to Bermuda? Emerald Group can help.
For the best recruitment solutions in the actuarial and financial services sectors, call us on +44 (0)207 283 2520.
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