ROUNDTABLE: INSURTECH
HOW DOES REGULATION OF THE SECTOR AFFECT YOUR BUSINESS?
“The creation of the licence is attracting lots of startups in the crypto space.”
Adam Adamson
Adam Adamson: We’re a bit on the outside of the norm in that insurance in the crypto space has traditionally been very unregulated. That’s not helpful if you want to get institutional investors to come in and put money behind you. Nayms was formed to bring it into a regulated area. In looking at all the different jurisdictions, Singapore, London, Bermuda stood out. I give a lot of credit to the Premier for some of his vision on this. The creation of the licence is attracting lots of startups in the crypto space to Bermuda.
Crypto and decentralised finance is inherently a non-regulated industry. That’s the intent behind it, but it isn’t something that works. You can’t have institutional companies involved, but the BMA has the licences and infrastructure which allows a company like us to set up. As a result, there are other companies looking at utilising our technology to be able to transact business. >>>
“People who are innovative like to be with other innovative people.”
Darren Wolfberg
<<< There are also other unregulated insurers asking if they can work with Bermuda. They are looking at how they enter the Sandbox. They are looking at ways to be a regulated entity.
Darren Wolfberg: It falls back on the BMA and the regulation and licences and framework it provides. People who are innovative like to be with other innovative people; equally, people who are regulated like to be with others who are regulated. That’s something that Bermuda has been able to deliver: the two key pillars of innovation and regulation.
George Alayon: I have probably reviewed almost 100 pitches since we established the framework. It is very exciting to witness how those ideas are progressing, but the BMA is at a maturity level where we want to see tangible solutions. We do not accept business plans with ideas from three years ago; we want new ideas and action.
“The attraction of Bermuda is precisely that it is a regulated marketplace.”
Adam Adamson
Adamson: We ask if it solves a particular problem. What are the risks around it? Software as a Service companies do not necessarily need regulation, but the engagement with us adds its own value because they’re often enabling regulated companies to be compliant with what we publish.
In terms of the crypto space specifically, I agree that the attraction of Bermuda is precisely that it is a regulated marketplace.
Originally in the crypto space, people sought a lack of regulation. Now, people are focused on Bermuda’s infrastructure because everybody’s seeking investors and they want to see regulation. >>>
“Not everything is easy here from a startup perspective.”
Devon Sherman
<<< The whole infrastructure of the licensing here makes it an attractive place for crypto and digital asset companies.
Devon Sherman: One thing to add is that not everything is easy here from a startup perspective. Opening a bank account as a newly established company or obtaining critical licences can be prohibitively expensive. The pricetag of doing business here is definitely scaring certain startups away. While it is not easy to immediately solve this, we can collectively tackle it and create more startup-friendly processes.
“If they have good innovation, that’s what matters.”
Mitchell Klink
Mitchell Klink: Bermuda is very good about institution-backed startups that are well capitalised. When you’re a young garage startup, there are so many more hurdles because of that lack of certainty and credibility. Bermuda promotes a gold standard of compliance and regulation.
But many startups begin in a garage; I don’t want to limit those from having an opportunity here. If they have good innovation, that’s what matters. But it’s an expensive place to bootstrap.
“We don’t want to bet the farm from a jurisdictional perspective.”
Darren Wolfberg
Wolfberg: It’s very difficult to balance between attracting these garage startups with the spirit of innovation and talented young people, yet the reason we’re here is because of the solid reputation of the BMA. We don’t want to bet the farm from a jurisdictional perspective.
It’s a balance between attracting the new startups, lowering the barrier to entry, attracting the right people and allowing those folks through the gates who don’t bring down the reputation of the jurisdiction.
Image courtesy of Shutterstock / dm-visig
