20 June 2018
Insurance offering a key focus for Bermuda's newest law firm
In late 2017, a new law firm entered the Bermuda market. Here, Michael Hanson, managing partner of Carey Olsen Bermuda, shares his plans for the firm and what the opening says about the Bermuda marketplace.
The opening of Carey Olsen Bermuda late last year, like so many things, came about through a combination of chance and opportunity.
Given Bermuda's reputation as a highly respected and successful international finance centre it had for a long time been on the radar of Carey Olsen, a leading international offshore law firm. I was someone looking to establish something new – and having acted for many of the island's insurers, reinsurers and captives, establishing an association between us was an interesting prospect. Together, we made the opportunity a reality and Carey Olsen Bermuda opened in November 2017.
The opening of the office is reflective of a change we have seen taking place across the Bermuda legal landscape for some time. Historically, it had always been international firms with a Bermuda presence who were the ones that had expanded out from their original base in Bermuda. More recently however, the trend has been for a number of local firms to enter into affiliations of one sort or another with other global firms. Carey Olsen Bermuda is one of the recent manifestations of this.
We believe our arrival provides meaningful choice and competition in the Bermuda market for legal services and it is our aim to make Carey Olsen Bermuda a leading firm in terms of quality and responsiveness.
The initial focus of the office has been on dispute resolution, private client and trusts and regulatory advice. Personally speaking, my practice is centred on Bermuda human capital and regulatory law where I advise a number of the largest global insurance and reinsurance businesses. I also act for international businesses with offices in Bermuda, including banks, accountancy firms and hedge funds.
Fellow partner Keith Robinson, who joined the firm shortly after its launch, has particular expertise in high-value litigation and trust restructurings, often with a multi-jurisdictional element. We've since been joined by Counsel Henry Tucker who is an accomplished commercial litigator with a focus on insolvency, restructuring and regulatory advice.
It is fair to say that the office is in a period of rapid growth and the arrival of corporate lawyer Mary Ward in late June will be another milestone. Mary trained with Slaughter & May in London and was with Linklaters in New York before moving to Bermuda to join Conyers Dill & Pearman where she has practiced for 15 years. Mary has particular corporate expertise in insurance, reinsurance and insurance-linked securities (ILS). From the outset, our aim has been to build a market leading full-service offering and Mary will play a key role in that strategy.
Our insurance offering within the corporate team is a key element in the evolution and growth of Carey Olsen Bermuda and we have a number of technically accomplished corporate lawyers joining Mary throughout the summer.
Of course, developing our insurance capabilities is vital as Bermuda remains one of the most important financial centres in the world for insurance and reinsurance. The jurisdiction is home to the world's biggest captive insurance market and a burgeoning ILS sector, while Bermuda reinsurers make up more than a third of the global reinsurance market based on property/casualty net premiums earned.
Having said that, Bermuda is not a jurisdiction resting on its laurels. According to Bermuda Monetary Authority (BMA) statistics, Bermuda’s insurance industry registered a total of 58 new insurers in 2017, ranging from captives and long-term re/insurers to special purpose insurers, compared to 42 in 2016.
Of this figure, 17 new captive licenses were registered, compared to 13 in 2016. Collectively, Bermuda captives wrote $54 billion in net premiums in 2017. As the BMA pointed out at the time of releasing the figures, this improvement came against a backdrop of challenging market conditions globally, including mergers and acquisitions activity and consolidations.
From my perspective, I find the figures encouraging on a number of levels. Firstly, to see the number of new captive licenses continue to rise underlines the jurisdiction's ongoing reputation in the global arena. The market, quite rightly, sees Bermuda as the place to go for risk management solutions, owing to our professionalism, pragmatic regulation, know-how and reliability.
Secondly, while captives have for a long time been seen as the preserve of large multinational companies, steady growth in the Bermuda figures, coupled with year-on-year growth in the number of captives currently in operation globally (Marsh's 2017 Captive Landscape Report), would suggest we are finally beginning to see increased participation by smaller and middle-market companies. Greater involvement by these companies has been predicted for some time but it's clear from our own experiences too that they are now increasingly open to exploring what benefits could be enjoyed by bringing their risk management and financing in-house.
Overall, the BMA figures revealed that as at the end of 2017 there were 739 active captives domiciled in Bermuda and that of the 17 new captive insurers licensed last year, 12 were Class 1 captives – a single-parent captive insurance company underwriting only the risks of the owners of the insurance company and affiliates of the owners. In terms of the types of business being written, these new Class 1s covered risks from Canadian conglomerates writing general liability and workers compensation, to US healthcare captives insuring nursing homes and medical stop-loss cover for employees.
While the majority of the new captives originated in the US, there were also a number that came from Australia, Canada, Europe and Latin America. The Canada and Latin America connection is particularly encouraging as the Bermuda Business Development Agency (BDA) has made both markets a key focus of its business development efforts in recent years. In fact, it was only this month [May 2018] when the BDA and a group of captive specialists headed to Vancouver and Toronto to raise awareness about the value of captives to Canadian corporations. The BDA hosted an executive forum in Vancouver on Bermuda's captive insurance solutions, before visiting Toronto to meet with industry service providers.
Similarly, Bermuda has seen interest from the Latin American market too, with the establishment of insurers out of Chile, Colombia and Mexico in the past couple of years.
It goes without saying that first rate legal services will play a crucial role in Bermuda maintaining its stellar reputation and in attracting this emerging stream of business from new markets going forward. By the same token, Carey Olsen Bermuda intends to become a key player in the provision of legal services to the insurance, reinsurance and ILS sectors to ensure it happens.
An original version of this article was published by Captive Review, June 2018.
© Carey Olsen 2018.
Carey Olsen Bermuda Limited is a limited liability company incorporated in Bermuda and approved and recognised under the Bermuda Bar (Professional Companies) Rules 2009. The use of the title "Partner" is merely to denote seniority. Services are provided on the basis of our current terms of business.