The unique qualities that made Bermuda the choice for Athora Life Re

As Athora’s Bermuda-based re/insurance carrier, Athora Life Re sets out to provide innovative and creative capital optimisation and risk management solutions to European life insurers so that they can free up capital, management capacities and/or operating resources.

“When Athora deconsolidated from Athene in 2018, we knew that a re/insurance proposition was going to be a key part of our strategy,” says Athora Life Re chief executive officer, Amy Ponnampalam.

“Given Bermuda’s position as one of the world’s larger re/insurance markets, it made sense to establish a re/insurance presence here. The Athora Life Re team brings together experience from leading re/insurers, insurers and consultancies, affording us the ability to develop commercial solutions with a strong focus on risk management.”

Corporate work

A key part of Athora’s long-term strategy is the provision of re/insurance solutions to corporate clients and, as the second largest re/insurance market globally, Bermuda is ideally placed to enable it to achieve this aim. Another attraction is the fact that Bermuda’s status as a robust, regulated re/insurance market supports the company’s long-term view.

“The Bermuda regulator, the Bermuda Monetary Authority (BMA), has significant experience in overseeing re/insurance carriers, which further enhances the credibility of the Island as a leading market for re/insurance,” says Ponnampalam.

On top of this, Bermuda has been granted equivalent status under the Solvency II directive by the EU and is one of only three jurisdictions that is a fully Solvency II-equivalent jurisdiction (Switzerland and Japan being the other two).

“This is important as most of our clients are based in Europe and therefore our equivalent status brings qualitative and quantitative benefits with our re/insurance solutions,” says Ponnampalam.

Another advantage is the fact that there is an established “peer” presence on Bermuda. “Many other major insurance groups and re/insurance carriers operate on the Island. We are in good company,” says Ponnampalam.

“Bermuda is also a great place to attract and build talent. We have attracted highly qualified individuals to our team, and are involved in initiatives to develop local talent to support the sustainability of the re/insurance market.”

In the short time since the company’s incorporation in 2017, Athora Life Re has successfully implemented internal and external re/insurance transactions with European counterparties, achieved investment-grade financial strength ratings, established operations and governance, and built great relationships with its Athora colleagues across Europe, who support Athora Life Re in many important ways.

“None of these achievements would have been possible without the strong team we have built in Bermuda,” notes Ponnampalam.

Good rules

The regulatory framework in Bermuda is deemed equivalent to that in Europe and the US, and the formal recognition of equivalence which has been achieved by Bermuda in recent years is extremely important to the re/insurance market on the Island.

“Over the 10 years that I have lived and worked in Bermuda, I have seen the evolution of the regulatory framework for long term insurers, starting with the BMA’s initial industry consultations around an enhanced regime and achieving full equivalence with Solvency II, to becoming an established and widely recognised regulatory regime which meets international standards,” Ponnampalam says.

“The change in the regulatory framework over these years has brought new challenges to market players, but Bermuda has managed to balance enhanced regulation with maintaining room for growth and innovation. This remains a key attraction of Bermuda.”

She believes the strength of regulation on the Island has been a significant driver for the increase in long term business over recent years. Developed life insurance markets such as North America and Europe have created demand for capital solutions from credible, well-regulated counterparties, and Bermuda has been able to satisfy this need.

“The Island has attracted a strong skillset when it comes to developing the long term market, and the network of ideas and knowledge that exists here today is a real asset,” she says.

Over the coming months, the company remains focused on growing its re/insurance operations in Bermuda and continuing to serve its clients across Europe.

“We have developed a strong pipeline of opportunities for 2021 (and beyond) and are excited by the prospect of turning that pipeline into long-term relationships,” adds Ponnampalam.

“We also look forward to continuing to support the local community, with an emphasis on developing opportunities for education and career enhancement. We have a strong desire to create a sustainable re/insurance market in Bermuda and are therefore focused on generating opportunities to train and develop the necessary skills on the Island.

“We have established our support for Bermuda College through joining a small group of our peers in providing financial support for the development of a new Career Development wing, and we also look forward to welcoming our summer 2021 interns to the team.”

Image: Shutterstock.com/hyotographics

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