FOREWORD: BIMA

ALIVE AND WELL, AND INNOVATING

The Bermuda captive insurance market is alive and well, with new licensed insurance entities and notable expansion in current captives, writes Grainne Richmond, president of the Bermuda Insurance Management Association.

“Throughout the year we held talks with other insurance and business organisations in Bermuda.”
Grainne Richmond, BIMA

How have you and your members managed the challenges of COVID-19?

We have all experienced an extraordinary 18 to 24 months and I will not attempt to put into words what we have all personally gone through.

Bermuda and the Bermuda captive insurance market, like the rest of the world, was impacted by COVID-19. For Bermuda Insurance Management Association (BIMA) members, on the administration front we all pivoted and adapted to working from home, handled lockdowns and partial reopenings, and got to grips with virtual meetings with our stakeholders, regulator and other service providers.

For an island of 21 square miles our government leadership, IT infrastructure and health system stood strong and we maintained our reputation as a leading financial service centre.

We all went through unplanned changes and I can say that our members responded to client services needs magnificently. BIMA members along with the wider Bermuda captives market showed it can adapt, pivot and continue to meet client needs during uncertain times. Audit deadlines were met, important renewal deadlines achieved along with important regulatory reporting requirements and reporting.

We missed meeting our clients face to face but the increased communication through strong virtual platforms assisted members and their stakeholders ensure policyholder needs were being met in the captive programmes.

How would you characterise the health of the captives sector on Bermuda?

The Bermuda captives market is very much alive and well, with new licensed insurance entities up in 2020 and 2021 along with a very notable growth and expansion in current captives. A few factors have contributed to this.

Bermuda continues to the lead the way on innovation and this is evident in the captive insurance space through cryptocurrency and cannabis captives being created.

The hard market which began before the pandemic continues today—this has led captive owners to re-evaluate the role the captive can play in their insurance programme, and new stakeholders creating new captives to assist with gaps in coverage, among other matters.

There was an increase in certain lines of coverage such as D&O and cyber, and with guidance provided by the Bermuda Monetary Authority (BMA) in early 2021 on material change it led current captives to adopt their programmes in a timely manner to meet the quickly changing needs of owners.

We also saw an increase in formations from Canada and Latin America who highly value Bermuda’s strong regulatory reputation and high quality service from the industry.

“We look forward to going back to an in-person event in 2022.”

What have been the highlights of BIMA’s past 12 months?

Over the last 12 months our members have been very busy dealing with the pandemic and increased business. During this time the association has been:

  • Working with the BMA and BIMA members on the adoption of the Insurance Sector Operational Cyber Risk Management Code of Conduct, which all licensed insurance entities are required to adopt by December 31, 2021.
  • We worked with the BMA earlier in 2021 on what constitutes a material change in the captive space that is required to be notified to the BMA.
  • Throughout the year we held talks with other insurance and business organisations in Bermuda such as the Association of Bermuda Insurers & Reinsurers and the Association of Bermuda International Companies to discuss local and global matters which could impact the captive insurance landscape.
  • At the start of 2021 the association engaged the services of PwC Bermuda to conduct a study on the captive industry organisations in Bermuda: BIMA, the Bermuda Captive Conference, and the Bermuda Captive Owners Association. With mergers and acquisitions in the insurance manager space, virtual conferences and increased stakeholder requirements and awareness, the captives market needed to assess the role each of these organisations play and what, if any, changes would be required to ensure we are adequately positioned for 2022 and beyond. The review committee, consisting of insurance manager representatives, PwC, Pat Philip Fairn, The Whitfield Group and Carey Olsen, is in the closing stages of the review and information will be shared in early 2022.
  • Bermuda hosted its second virtual captives conference in September and although we prefer to have people in person on our shores the streamlined virtual conference proved very successful in 2021. We look forward to going back to an in-person event in 2022.

What are your aims for the next 12 months?

First and foremost our aim is always to ensure the interests of our members and our members’ stakeholders, ie, our captive owners, are protected and any concerns they have are addressed. To achieve this our focus over the next six months would be:

  • To continue working with the regulator on upcoming consultation papers along with any other proposed legislation changes.
  • Working with the Bermuda Business Development Agency on ensuring that Bermuda remains at the forefront globally in decision-makers’ minds when choosing a captive domicile.
  • Ensuring our members and stakeholders stay informed on global legislation tax developments that may impact the captive space.
  • To continue working with government and industry to have in-person client meetings here in Bermuda back to the pre-pandemic level.

Overall, after what has been a very turbulent and difficult two years globally, the main aim of the Bermuda captives market is to continue to show the strength we have in the past and build on the strong foundations in place that worked in keeping the Bermuda captive insurance market thriving and developing, and maintaining our blue chip reputation as the top solution in our stakeholders’ risk management frameworks.

For more information on the Bermuda Insurance Management Association, visit: bima.bm

Image courtesy of Shutterstock / Paul S. Wolf