A fresh start: Reardon outlines her vision for Hiscox on Bermuda

If one phrase can adequately sum up the turbulence and uncertainty unleashed by the pandemic over the last 18 months, from an optimist’s perspective, it might just be “new normal”.

As the dust begins to settle on the chaos, people and businesses are emerging into a markedly changed world, with a host of new perspectives, ideas and points of focus starting to take shape, from the business world to politics, our personal lives and beyond.

What COVID-19 has taught us is that nothing is permanent, and that applies to the re/insurance industry as well as the morning commute, the future of Pret à Manger, or whether you will ever spend a full week in an office again.

The announcement that Kathleen Reardon, long-standing chief executive of Hamilton Re, would be leaving the company after eight years was, perhaps, not as shocking in the context of October 2020 as it might have been in any other year.

Reardon built a sterling reputation at Hamilton as the company grew into one of the most important players in the Bermudian re/insurance market, so what prompted the change of scenery especially during such a challenging time for the sector?

Speaking exclusively to Bermuda:Re+ILS, Reardon said that when the opportunity arose to lead Hiscox Re & ILS, it was the challenge of strengthening the profile of an already venerable name in the industry after a difficult period that appealed the most.

Changing lanes

Reardon said the role has lived up to her expectations since she took over from Mike Krefta in January 2021.

“When the opportunity became available, it certainly struck my interest, to be able to work for a company that you’ve admired for so long,” she said.

“I thought that the experience I had at Hamilton Re (and formerly at ACE) would be useful in helping Hiscox Re & ILS evolve after a couple of tough years of market conditions. It’s a chance to take advantage of the improving marketplace, get people motivated and passionate, and look forward to new opportunities.

“I’m thrilled to be here. I’m now in month eight, and it’s everything I thought it would be and more. Now, I’m looking forward to furthering the strategy and advancing the mandate that we have here.”

The executive has wasted no time in moving that agenda forward. Earlier this year, the company capitalised on surging demand for alternative assets as investors globally continued to hunt for yield in an era of low interest rates. It raised about $200 million in the first half of 2021 to invest in insurance-linked securities (ILS), while also evaluating additional areas of opportunity in specialty and marine.

For Reardon, the new approach is about reinvigorating the teams as well as riding the momentum of stronger pricing conditions for carriers in the market.

“We have just completed a strategy refresh. You start with your vision, which for us remains largely unchanged as ‘one team, unlocking capital, embracing risk’,” she explained. “This is about us bringing all our capabilities together, from underwriting through to analytics, research and claims to explore and find expert solutions to meet our clients’ risk challenges.”

“We also built a structure to identify our strategic enablers, three areas that we want to focus on and be strong in.

“We highlighted the following: smart underwriting and analytics; optimised capital management; and, finally, putting the client at the core of everything we do. This is in line with my philosophy of invigorating my team in the market as it stands.

“We have some wind at our back, this is our time to shine,” she added.

Opportunity knocks

Reardon isn’t alone in spying plenty of opportunities for growth on the Island. The pandemic has accelerated Bermuda’s enticing proposition for new, innovative startups looking to get involved in the industry. With reinsurance pricing over the last year suggesting that the sector remains very attractive to capital providers, the competition is heating up.

Rather than viewing this as a threat to traditional industry players such as Hiscox Re, Reardon says that the new entrants are simply part of the wave of optimism that is targeting the plentiful opportunities that are available.

“Overall, the market is probably the most attractive it has been in almost a decade,” she said.

“Every day the risk is increasing, and where we have emerging risks, we need to get capital for support. For example, we have climate change (which is increasing our view of risk); we have cyber, which is causing an increased frequency of ransomware, etc. So, there are plenty of opportunities to put this new capital to work.

“We are doing it in a sensible way. We’re setting rates at an adequate level where we’ll continue supporting our clients and partners in the long run. I think that’s smart. The new companies that have entered the market over the past year haven’t caused too much disruption. There were plenty of opportunities to go around.”

It makes perfect sense that these startups and challenger businesses are choosing to make Bermuda their home. Given the Island’s reputation for innovation and support for new ideas, it is an obvious HQ choice for new re/insurance businesses—especially given the strength and supportiveness of the existing ecosystem.

Reardon says that, given the forward-thinking nature of local regulators and the Island’s strategic geographical position between the key markets of the US, the UK, and the EU, it is likely to remain a hub of the global industry for years to come.

“Bermuda has proved constantly over the decades that it’s very innovative,” she said.

“We have a regulator who is very forward-looking and supportive of improvement and enhancing our industry, while obviously retaining the capital solvency ratios that we need. In short, the Bermuda Monetary Authority is a prominent reason why Bermuda has had such success over the years.

“Also, you can’t ignore the location. We are in the middle of the Atlantic, which gives us an opportune time zone and position for travel. It’s not necessarily a priority, but it is certainly helpful. A lot of great ideas were born out here and succeeded. If you go back to captives and the cat startups in ILS, success breeds more success.”

With Reardon in charge at Hiscox Re & ILS, her magic touch is likely to bring even more rewards in the future.

Kathleen Reardon is chief executive officer of Hiscox Re & ILS. She can be contacted at: kathleen.reardon@hiscox.com