8 September 2013 News

Bermuda set to become ILS global leader

Experts estimate the global Insurance Linked Securities (ILS) market could double or even triple in the next five to ten years and that Bermuda is set to take pole position in the market in the establishment and listing of these vehicles.

That is the view of ILS Bermuda, a team of global players who are maximising the potential of the alternative reinsurance, convergence and insurance-linked securitisation marketplace. It says a large part of this lucrative market is coming to the island, lured by the knowledge that it is already an established reinsurance market, has great service providers and the right legislation in place to make setting up ILS quick and easy.

Investors, cedents and others involved see great growth opportunity which is resulting in increased levels of activity in ILS and has a positive knockon effect on the economy of Bermuda, the organisation said.

Bermuda’s market has already grown from a standing start in 2009 when legislation was brought in to make it easier to set up special purpose vehicles, which are used to set up ILS, Industry Loss Warranties and side cars. The Bermuda Stock Exchange now has a record $8.2 billion of ILS listed vehicles, a figure which has jumped from just $500 million in 2010.

“Many in the industry believe that the timing is now for ILS and that something of a tipping point has been reached. It is with this backdrop that the ILS Bermuda Convergence 2013 Networking Event was born,” said Jason Carne head of ILS at KPMG in Bermuda and an ILS Bermuda Convergence 2013 organising committee member.

“Approximately 40 percent of ILS market cat bond issuances in 2012 were in Bermuda, making this inaugural event a fantastic opportunity for key players in the industry to gather and for new investors to learn more about the opportunities available to them and to get involved.”

ILS Bermuda, along with its members engaged in capital markets and insurance, are hosting Convergence 2013, taking place in Hamilton, Bermuda on November 13 and 14. This is an invitation-only event, bringing together Bermuda’s capital market leaders and insurance innovators.

“Bermuda is where the ILS investors and sponsors are, and now we are seeing businesses moving from other jurisdictions to Bermuda. Convergence 2013 will bring these groups together in a way no other event can,” said Brad Adderley, insurance partner at law firm Appleby and ILS Bermuda Convergence 2013 organising committee member.

“Convergence 2013 also will bring insight on why Bermuda has the longevity and infrastructure needed, is a natural fit for ILS and has potential to build a snowball effect we are seeing in the market.”

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