New arrivals to Bermuda’s market tend to arrive in a benign environment. The nature of the insurance cycle means most enter a hard market, and that’s no different for the startups in the last couple of years.
“There’s no denying that timing is a big part of the new class,” said Prashanth Gangu, chief operation officer of SiriusPoint. It launched in February 2021, following the merger of Third Point Reinsurance and Sirius International Insurance Group.
“Out of the gate, all the new startups have demonstrated fantastic results in terms of underwriting.”
On the other hand, new players in Bermuda also face old challenges, and among the toughest is finding the people they need.
“We all know it’s very difficult to find talent on the Island. Whether it’s brokers or on the underwriting side, it’s extremely challenging,” said Peter Horrobin, co-founder and co-chief executive officer of the D&O specialist managing general agent (MGA) Banyan Risk, launched in July 2020.
To discuss that—and other challenges—facing the newest entrants to the Bermuda market, Gangu and Horrobin were joined by three others from the class of 2020/21 and the wider Bermuda market: Brad Adderley, Bermuda office managing partner and the re/insurance global sector leader at law firm Appleby; Adam Champion, executive vice president capital markets and reinsurance at global reinsurance, wholesale and specialty broker Ed Broking—one of several intermediaries launched in recent years, including 14 registered in Bermuda in 2021; and Peta White, president of class 4 reinsurer Vantage Risk, launched in 2020, and having completed its second renewals in January 2022.
“It’s always a bit of musical chairs when it comes to the talent pool.”
Adam Champion, Ed Broking
The war for talent
For Horrobin, there’s no denying that personnel remains a critical challenge in Bermuda—for all players, old and new.
“It is a big problem on the Island right now. The ability to find local talent is extremely challenging,” he said. “I know of certain markets in Bermuda that have six, seven or eight open positions.”
That’s partly, of course, a result of Bermuda’s size as an island of just 64,000 people. Many are hired from outside, but that means relocating.
“It’s a small island where everybody knows everyone. It’s always a bit of musical chairs when it comes to the talent pool,” said Champion. “That puts a lot of pressure on companies here to retain staff and to give them the long-term incentives to keep them and build the company.”
An influx of new businesses exacerbates the problem, as it has in life insurance, according to Adderley.
“There’s been a huge influx of life reinsurance in Bermuda,” he said. “You’re seeing eight to 10 new billion-dollar life reinsurers formed a year. So the talent gap there is not just officers; it’s directors too. Having the resident or independent life reinsurance experience on the board is important when you have a life reinsurer backed by a private equity firm.”
How much of a problem it is depends on which side of the contract you’re on, however.
“It’s great for the employee; there’s no question for about that,” remarked Horrobin.
“It’s great for the employee; there’s no question for about that.”
Peter Horrobin, Banyan Risk
Small and perfectly formed
There are reasons to think the class of 2020/21 reinsurers might prosper. For one, the COVID-19 pandemic and new ways of working have opened new hiring opportunities. Vantage Risk, for example, operates in Bermuda and the US. Bermuda is office-based, but in the US it is entirely virtual.
“We’ve had to be creative about how to bring people together and build the culture virtually, but the opportunity is there to hire the best talent no matter where they are,” said White.
Others are avoiding much of the problem by testing new models. SiriusPoint, for instance, aims to become “a platform” for specialist MGAs, handling the back end infrastructure, dealing with ratings agencies and regulators and managing the balance sheet, capital position and reserves.
“Instead of hiring underwriting teams and attracting talent in the classic way, we are finding good MGAs that are specialists and focused on technology and customers and then supporting them with the balance sheet and the licences we have,” said Gangu.
He thinks smaller startups have added attractions for talent.
“People are a bit tired of being in large companies where things move more slowly, and you feel like you’re a cog in the wheel. If you can be your own master or work in a small shop that moves fast and can be more thoughtful and better apply technology, there’s a lot of value in that,” he said.
“In the war for talent between large companies and the smaller players, the smaller players are winning it hand over fist.”
“The opportunity is there to hire the best talent no matter where they are.”
Peta White, Vantage Risk
Keeping cautious
More broadly, the distinctive characteristics of the class of 2020/21 could help.
The focus many have on technology brings new challenges in finding people with appropriate skills, but also in making the industry attractive. So, too, does the increasing role of insurance linked securities (ILS)—now a routine part of business plans, according to Champion.
In the past, as Horrobin noted, much of the top talent headed to investment banks and other sectors, with re/insurance overlooked, but that’s changing.
“Everybody going into investment banking has long been a problem when trying to hire top talent,” agreed Champion, “but when you bring ILS into the fold, you’re now seeing a blend of banking and finance and insurance which is exciting for a lot of people.
“We now have an overlap between investment banking, hedge funds, private equity, multi-strategy and pension funds all investing in insurance.”
As he said: “The industry can attract a lot of talent with this convergence.”
At the same time, there’s less of a rush to build premiums and teams. Adderley said the new class tends to be more focused than previous waves, concentrating on specialty lines and in no rush to deploy capital. There’s a more cautious approach, he said.
“They are more thoughtful about who they’re hiring, the areas they are focusing on and how they’re trying to go about it,” he said.
That’s certainly the case at MGA Banyan Risk. Its hiring is constrained by choice more than available talent.
“A key tenet of the strategy is utilising the technology that we’re building to ensure that we have one of the best gross written premium to headcount ratios,” he said. “Some new markets we’re seeing are hiring substantial numbers of people in specific areas.
“Right now, that might be great, but we all acknowledge that the hard market won’t last forever. We’re keen to make sure we have an appropriated headcount for the cycle, so we’re never forced to top-line underwrite just to pay the bills.”
To view the full interview visit: intelligentinsurer.com
Image: Shutterstock / winnond
