The Insurer: Bermuda weathers Covid-19 and Hurricane Paulette: ABIR’s Huff
September 17, 2020
ABIR CEO John Huff speaks with The ReInsurer; see the full interview here.
Bermuda’s (re)insurers coped well with the shift to virtual working as the pandemic took hold amid important renewals, with capital raising now a focus ahead of anticipated opportunities from hardening rates, according to John Huff, president and CEO of the Association of Bermuda Insurers and Reinsurers (ABIR).
Huff was speaking to The ReInsurer the same week that Paulette blew through the island as a Category 2 hurricane. Paulette’s eye encircled the entire island, and produced some of the strongest winds experienced by Bermudians in recent years.
“I really want to applaud Bermuda, the government and the Premier,” Huff said. “Bermuda really showed its resilience coming through this cat. It was also an opportunity to show the stringent building codes in Bermuda. We came through with flying colours. One day we have Cat 2 coming through and the next day you don’t see a blade of grass out of place.
“If you have not been through a Category 2 storm it is quite an event, it is pretty loud, and we have a few limbs down but overall a success.”
The island has also coped well with the impact of Covid-19. Huff noted that at the time of the interview there were only four active cases. As of 15 September, Bermuda had confirmed 178 cases and just nine deaths.
For Bermuda’s companies, there was a relatively smooth shift to virtual working at an important time for the island’s (re)insurers.
“First and foremost, the investment in technology has delivered, not only for the industry but also the regulator, the Bermuda Monetary Authority,” Huff said. “Bermuda has been a leader in the containment of Covid-19. We went into a curfew here and all our companies went to a virtual environment. We survived the April renewals and mid-year renewals, which were all done virtually so that was really quite an accomplishment for the industry.”
People on the island are returning to offices in stages. Huff reported the ABIR office has been open for eight weeks.
Covid-19 will also present a challenge for the island’s (re)insurers in terms of losses. Huff highlighted the impact on reserving for credit, surety and event cancellation as examples.
The industry’s exposure to business interruption has attracted the most focus. Attention has also turned to the industry’s potential role in covering BI losses from future pandemics. Huff said the Bermuda market will work with governments that are discussing proposals where it can.
“There will certainly be a role for industry, the expertise, the modelling and the analytics,” Huff said. “I think there is an open question of how much risk bearing there will be by the industry and there are some competing proposals in that regard.”
Bermuda is also being viewed as a market of great opportunity at the moment, with potential new start-ups looking to take advantage of hardening rates for both insurance and reinsurance.
“There is quite a bit of capital raising going on,” Huff said. “People are looking where there may be new start-ups and actually existing companies are doing a great job of raising new capital in anticipation of really an optimistic view that the uncertainty in the world will create opportunities for insurance and reinsurance.”
Huff also raised the prospect of mergers and acquisitions. “I have a saying that M&A is really in Bermuda’s DNA,” he said.
In addition, Huff identified big opportunities for the island’s market in the areas of run-off and cyber.