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Bermuda's evolution and its effects on the race for actuarial talent

Interview with Patrick McAleer, Director, International Actuarial – Emerald Group, on the latest developments in Bermuda's re/insurance landscape, the recent trend of new reinsurers relocating to Bermuda and the effects on reinsurance markets, the actuarie's work as well as the impact on the global competition for actuarial talents. Patrick McAleer studied international business and he works as a Director in Emerald Group’s International Team.
Written on 09/18/23

1)    Bermuda is also known as the “world’s risk capital”. Could you explore the backgrounds to this notion? 

Bermuda has been at the heart of the captive insurance and reinsurance space for decades now, with the country emerging as the leading market for this area. It’s now home to a range of insurers and reinsurers. The demand from companies and market needs has continued to grow and the country, economy and insurance regulator have committed to being able to meet this demand. Although other markets have appeared and grown during this time, Bermuda is still at the forefront of the risk space within the insurance and reinsurance world. Companies have partly set up here for tax purposes, but now there is also a supply of actuaries, underwriters and seasoned insurance professionals, so it is a priority location for  new companies opening up in this space. Re/insurers and their employees see this as the place they want and need to be within the insurance world.

2)    Are there certain insurance and/or financial market fields, predominantly represented in Bermuda today?

Bermuda has always been a huge property and casualty market, and the largest supplier of catastrophe reinsurance to US insurers.  In addition, the areas covered in the market have continued to grow. Many reinsurers have also branched into alternative risk transfer offerings, insurance linked solutions and catastrophe bonds. in recent years there has been a tremendous increase in the number of life reinsurers and captives that have been established in Bermuda. Previously this was a very small market on the island, but there have been a number of life insurers who have set up reinsurance operations and also completely new life reinsurance companies.

3)    Recently, reinsurance companies have tended to relocate offshore. Can this be attributed to certain global events or developments, e.g., in financial markets, triggering an increased orientation towards Bermuda?

The recent trend of new reinsurers opening in Bermuda is due to local laws, which allow businesses that work with US insurance clients to operate under a streamlined set of regulatory requirements, without additional capital or regulatory collateral requirements. This, combined with the tax incentive of being based in Bermuda, gives companies a lot more flexibility. The recent market has seen a huge growth of run-off acquisition firms, with established and new reinsurers looking to grow through purchasing closed book portfolios, due to insurance companies looking to sell off portfolios and improve their solvency ratio. These acquisition firms see this as a great opportunity to increase value and grow quickly. This has been noticed in the market and this financial opportunity has been recognised, which has led to further players opening up shop and so the market has continued to grow.

4)    In which ways does this tendency affect today’s reinsurance markets and the work of actuaries?

With so much business being underwritten and priced from Bermuda and all deal work needing to be legally done from Bermuda, there is a large actuarial pool on island, as only limited work can be done remotely.  With the number of companies continuing to grow, this has led to a constant demand for actuaries, either working in-house or for consultancies who will act as responsible actuaries or help them set up operations. There has also been an increase in the number of consultancies on the island, due to trends in the market and greater demand for auditors and actuarial consulting work. Actuaries in Bermuda will typically gain a breadth of exposure early on in their career. Companies are quite lean in Bermuda because of hiring costs and immigration approvals for a new hire, so actuaries and other insurance professionals can gain exposure to a range of areas. 

5)    This may also have an impact on the already tight race for talents in the actuarial profession. How can recruiters succeed in overseas competition?

There is constant demand for actuaries on island. Companies are continuing to grow or open, so there are always new positions in the market. There is a large pool of actuaries there already, so you could ask why companies need recruiters. Employers have protection for two years when someone moves to Bermuda and employees’ work permits are tied to that employer during this period. Many actuaries’ careers will grow at a faster pace in Bermuda than they would in other markets and they are well compensated by their employer. These means that, despite the large number of actuaries, many are happy where they are due to the opportunities available, their role and the two year visa requirements.  All this means that there is the demand for recruiters to provide new actuaries for clients. It’s also such a competitive market that employers benefit from using a recruiter who can provide candidates quickly. At Emerald Group, we find candidates who don’t just rely on job boards and open up our searches to other candidates.

The actuarial world is also a small one, because of international recognition of qualifications and companies operating in different markets. Actuaries around the world are gaining exposure to different regulatory systems, meaning they can move to Bermuda and make an impact quickly, as they are familiar with the work being done there. Having moved actuaries to Bermuda from all over the world myself and knowing that clients are now flexible about where actuaries come from, Emerald Group are able to connect clients with international actuaries and help meet demand.  

6)    Allowing a glimpse into the future: Do you expect the process of relocating to proceed? What will be the consequences in Risk Management?

As long as Bermuda continues to commit to the re-/insurance world, I expect the demand for actuaries and the need for them to relocate to the island will remain. In a post-pandemic world, companies are more flexible, but the majority still want to have social interaction, which involves actuaries being in the office and on the island. Along with legal requirements and many actuaries wanting the life and career experience of living and working in Bermuda, I expect the trend of relocation to carry on, with more roles continuing to open. This, combined with new re/insurers and captives setting up all the time, further strengthens the need for relocation to continue.

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