Craig Redcliffe: I’d say we are in a hard market. We’ve seen some substantial price increases. We’ve seen a number of players pull back in terms of capacity or reduce their exposure to the property catastrophe reinsurance sector. As a result of that, we have seen less capacity available to deploy at the mid-year renewals. That’s putting pressure on the pricing. In many cases. Insurance-linked securities (ILS) managers have been able to negotiate not only significant price increases but also on terms such as moving further up into the reinsurance tower and negotiate higher attachment points.

I do think one must question whether the increased rates are sufficient to pay for the claims inflation and the general increased loss activity that we have been seeing the last few years.

Peter Dunlop: I’d agree with a lot of that. We’re also seeing an uptick in disputes. We have to find a solution to trapped collateral. We’re seeing different approaches to tackle this including the securitisation of trapped collateral. The legacy market is ideally placed to step up and take on a market-wide solution to the trapped collateral problem.

It’s undeniable that the issue is diminishing the interest in this space. We are also seeing interest from ILS investors in different lines. I would be happy to be proved wrong but I don’t believe cyber is a good fit for ILS. There are however short tail specialty lines with an investment return horizon that’s similar to property cat that could work.

We’re still seeing healthy levels of cat bonds, but they are not being issued at quite the scale. The spreads are higher, the price is better. But I wonder if investors will look in earnest now at other lines of business.

Taijaun Talbot: If you look at the past five years, there have been challenges. There were a number of loss events, starting in 2017. On top of that, now you have inflation and other wider economic challenges. Despite these things, we have seen a 44 percent increase in registrations of ILS vehicles, as of May 2022. So that is a real positive.

We have seen a shift in the market. There is more of a desire for simplicity and quality. You have obstacles in the market, but there is a sense of maturity around solving them. There is more consideration as to how funds are placed in the market—what their strategy is. Hopefully, that maturity builds something greater than we have seen before.

Helen Souza: I think of the market as resilient but also innovative. Innovation is key to Bermuda and our success. If I think back to 2012, so 10 years ago, ILS Bermuda was formed and a lot of innovation came from that. That is what Bermuda does very well: bringing together industry and driving change to bring business here.

Today, from a growth perspective, I’m an optimist. From a jurisdictional perspective, we are able to be a driver for innovation. I’m very interested to see how technology is going to play a role in the ILS market to drive efficiency and change. We’re seeing some diversification with increased issuance and a move into things such as mortgage bond risk.

Kathleen Faries: I was going to also mention the Convergence conference and its 10th anniversary. It is worth reflecting back on what the market was like back then. It is interesting to recall that the event was called “Convergence”. We were all trying to bridge insurance and capital markets different ways of talking about risk and capital. We don’t even think about this anymore, investors understand the asset class and have become a stable and embedded part of the reinsurance industry.

Bermuda shines when there’s dislocation, when there are hard markets, when people have gaps in coverage. And now after many years of hard work, we have a strong infrastructure, talent, and experience that can be leveraged in order to help client’s solve problems and find capital. At Artex, as a leading ILS facilitator, we are seeing the industry respond to this dislocation with innovation, creativity and ultimately problems getting solved.

Bermuda is able to do all that with speed—this is our differentiator. We’re getting capital to work very efficiently and quickly. It’s an amazing time for Bermuda because we have the capabilities, the infrastructure and the experience to help people.

In ILS, I agree there is an interest to move beyond property cat. We’re going on that journey. There’s definitely a move and technology will play a role.

Just as with property cat over the last 10 years, a big part of it was educating investors. Now they’ve been through some cycles, they’ve seen what can happen. We’re going to have to take that same journey outside of property cat with other lines. But in Bermuda we have the expertise and the experience to facilitate that trend effectively.

Adderley: Ten years ago, people didn’t know what a special purpose insurer was for. We had no cat bonds in Bermuda. We didn’t know how they worked. We took the BMA to meet investment banks to discuss doing business in Bermuda. Those were the days when everyone was using Ireland and Cayman. The regulations then were not right for cat bonds, and it was very expensive.

Souza: Yet now, we hold some 90 percent of the ILS market. It has been a very interesting journey.

Adderley: We have learned so much in that time. We are now seeing everyone try to copy us. Singapore and London have passed ILS regulations. Yet even those bonds are listed on the Bermuda Stock Exchange. We should not underestimate what we have achieved in the ILS space—nor take it for granted.