Following the financial troubles at 777 Re, a Hamilton-based reinsurer connected to the private equity firm 777 Partners, Bermuda’s premier, David Burt, has defended the resilience of the island’s life reinsurance market.
Burt conceded in a Financial Times article that although some challenges cannot be avoided, the way they are resolved should be the main concern.
Notably, Bermuda has grown into a major hub for life insurers looking to shift investment and longevity risks. 777 Re’s recent problems, however, have raised questions about private equity’s role in the industry.
According to reports, the reinsurer got involved in transactions connected to Josh Wander’s Miami-based company, which owns everything from low-cost airplanes to football teams.
Burt, who is also Bermuda’s minister of finance, emphasized the part the Bermuda Monetary Authority (BMA) played in handling the 777 Re problem. In reaction to the problems at the firm, the BMA, which oversees the financial industry on the island, has taken action to crack down on connected-party investments.
Burt stressed that international regulators should be comforted by the actions being taken to address concerns and stated that Bermuda has “a very strong and robust regulatory system.” It is acknowledged that we have a very solid regulatory framework, and we have taken care to make the regulations more stringent. must ensure that our foreign regulators, who might have voiced these specific worries, are aware of our seriousness about these issues, Burt added.
Bermuda’s financial system is seen as being on par with the regulatory environments of the US and Europe, having equal status with respect to solvency regulations.
Burt claims that the BMA has been leading the charge in resolving issues surrounding the ownership of insurers by private equity firms, actively collaborating with global authorities on the subject. He cited a BMA document from 2023 that described the particular hazards of private equity ownership and the authority’s more stringent investment regulations.
Burt also talked about more general issues about the insuranceability of natural calamities. He expressed hope that market cycles will eventually lessen the strain on consumers and stated that Bermuda’s insurance market would continue to play a crucial role in evaluating and managing these risks.
The ongoing problems of 777 Partner apparently took a new turn in July when it was revealed that the company’s London basketball team may have to disband as a result of a lawsuit backed by many creditors.
