ROUNDTABLE: INSURTECH
WHY IS BERMUDA INCREASINGLY ATTRACTIVE TO INSURTECH COMPANIES?
“We have three routes that companies can take.”
George Alayon
George Alayon: We pride ourselves on being a credible regulator. We know the market, and we focus on making sure that we create space where entities can prudently innovate. We have three routes that companies can take.
We have the innovation hub, which is for the non-licensable activities, those that do not need a licence from the BMA; we have the Sandbox for those that are not quite market-ready and still testing. Then, we have the full licences available for those that already have the capital and expertise to create a viable business.
“BMA will make sure that you’re fit for purpose.”
Josephine Noddings
Josephine Noddings: Bermuda as a regulator is well renowned, well established and gives real credibility to people that are licensed under that. Bermuda is at the forefront in regulating the digital asset and crypto space. The credibility that the BMA gives to startups helps give peace of mind to investors.
They know the BMA will make sure that you’re fit for purpose. The BMA is a different regulator as opposed to other jurisdictions. They work with stakeholders, with people coming into the space. They are accessible.
“It makes sense to come here.”
Mitchell Klink
Darren Wolfberg: Why Bermuda? We were looking for a highly credible ecosystem. Second, Bermuda is where climate risk is expressed—we couldn’t think of a better place to host our technology company.
Mitchell Klink: All the reasons that were mentioned, plus there is a talent ecosystem here. Not necessarily on the tech side, of course, but certainly in the industry side. So it makes sense to come here for many practical reasons.
James Ferris: For new startups seeking capital, Bermuda offers access to potential customers and capital providers. Bermuda, as a re/insurance hub, allows insurtech businesses to partner with local insurers and reinsurers to produce test and deploy products with the support of the industry and BMA.
“Bermuda offers access to potential customers.”
James Ferris
Devon Sherman: In addition to what’s been shared, Bermuda also shares attributes of the US, UK and Canadian healthcare systems which makes it a unique testing ground for healthtech startups as well as certain insurtech startups.
Corporate venture capital (VC) is also plentiful here and the angel investor network is becoming increasingly robust. Cactus, for example, was able to raise a quarter of a million from angel investors, which is meaningful at our stage.>>>
“The angel investor network is becoming increasingly robust.”
Devon Sherman
<<< With that said, there’s opportunity to continue to grow and educate the investor network. Understandably, people feel most comfortable investing in their areas of expertise so providing investors and potential investors with opportunities to become more educated on adjacent sectors, areas such as fintech, healthtech and climatetech, for instance, could go a long way.
There’s also opportunity to put Bermuda more on the radar of venture capitalists outside Bermuda and encourage greater VC engagement here as Bermuda incubates more local and global startups.
Heather Kitson: Bermuda is at the heart of the world’s risk capital, so it makes sense to be solving insurance problems here through technology and innovation. Why Bermuda? Aside from tax efficiency for some companies, from a regulatory perspective, the BMA is a nimble regulator for those companies who are regulated, and it offers speed to market, and supports innovation. >>>
“There is good access to capital and a wealth of opportunity here.”
Heather Kitson
<<< We also have top industry talent and a global marketplace here in Bermuda.
There is good access to capital and a wealth of opportunity here. Insurance companies are under pressure to find revenue from other sources; they’re looking to diversify and seeking new investment opportunities that will be accretive to their own business.
One downside is that Bermuda is a very expensive place to do business given the cost of living and associated high salaries. We need to continue to take steps to make Bermuda a more attractive place for businesses in terms of operating cost and continue to support the skillsets we can develop from local Bermudians.
The high operating cost can be a barrier to entry for some new startups who must be efficient with deployment of their initial capital.
“Bermuda was a natural fit for us from day one.”
Ari Chatterjee
Ari Chatterjee: Bermuda was a natural fit for us from day one. The BMA was the regulator of choice and the time zone is perfect. When Envelop started, Bermuda probably was not the market of choice for cyber reinsurance. London and US markets were much larger in terms of market share. But in the last five years, we have seen a dramatic shift.
More than 50 percent of the global cyber reinsurance market comes through Bermuda. That meant we could attract the talent to underwrite and offer products which are meaningful.
Bermuda has its real upside, especially for underwriting companies. The “Insurtech 2.0s”, which are more focused on underwriting than distribution, are a natural fit due to the regulatory environment here, due to the access to capital—not only trade capital, but also venture capital, and also the talent pool, which is quite conducive to business.
“A lot of hard work has been done in Bermuda over the last 20 years.”
Sandra DeSilva
Sandra DeSilva: I agree with a lot that has been stated and would also like to add some historical context. A lot of hard work has been done in Bermuda over the last 20 years to support insurtech today. As one of the first insurance technology companies, well before the term insurtech was born, we advised re/insurance companies to use technology as a strategic advantage. I have seen the thinking and adoption of technology usage transform over time.
In addition, Bermuda has been quite active internationally and showcasing Bermuda’s capabilities at centre-stage in this field. I gave a talk at the American Bar Association about the rise of AI in the insurance industry, participation of the Bermuda Government Advisory Board, where the business community was constantly supporting the Bermuda government with ideas with market trends in the industry, attracting global conferences to come to Bermuda such as cyber and insurtech plus many more.
Image courtesy of Shutterstock / Aliaksei Marozau
