Innovation and Intellectual Capital

We attended the recent InsuranceDay 2014 Bermuda Summit and were fortunate to be able to give a presentation about E-CAT (Economic Catastrophe Insurance), the core of our business model-  which generated a positive response and feedback.

A key theme of the conference was how innovation remains essential in the (re) insurance industry (as it does in any other that wishes to remain competitive) across a broad range of areas, from underwriting, to data acquisition and management, to risk selection and pricing. We at Awbury could not agree more. After all, “CAT bonds” are not new technology, nor is “alternative capital” something that suddenly appeared “ex machina” in recent years. If any (re)insurance centre has a history with being such a source, Bermuda does!

From our point of view, supported by our partners and in conjunction with our clients, we believe that we are living proof that a combination of innovation and intellectual capital, unconstrained by bureaucracy or the need to serve “higher purposes”,  can build and sustain a viable financial business, in an environment in which many parts of the industry (banks in particular) have lost the ability or will to create new businesses and business models. In fact, it is becoming a truism, that much of the innovation being seen is in so-called “shadow-banking”, which in fact denigrates many who wish to have nothing to do with banks!

The audience at the Bermuda Summit understood our thesis (and that or other speakers) that there are secular changes under way, which will lead naturally to a vast range of opportunities in E-CAT for those willing and able to recognize and seize them across a range of themes. We know from experience that product and business development never quite turn out as one might have expected, but also that as long as one does not become trapped in a “framing” mentality, opportunities do and will continue to arise, as many financial markets grapple unsuccessfully with the intended and unintended outcomes of regulatory behaviour, political bias, commoditization and geopolitical trends.

Being nimble and able to “dance between the raindrops” remain essential to Awbury’s continuing success; and we remain committed to helping our clients address issues in a way that protects their own franchises in financial and economic terms.

-The Awbury Team

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