bermuda capital

April 2017 · Bermuda

Interview with Mr. Mike S. McGavick, Chief Executive Officer of XL Group Ltd, Bermuda

"(...) As the insurance partner of the 35th America’s Cup we demonstrated the strength of our brand to a global audience of 363 million viewers."

Prisma Reports (PR): Highlight XL Catlin and how you see premiums growing in 2017 and 2018?

Mike S. McGavick (MSM): We are in a very difficult market where the competition for premiums is fierce. We are having a bit more success than others in growing a little bit in the areas where we want. We think that this success is due to the increased relevance of our platform we created by bringing XL and Catlin together. That is working as hoped.

PR: The future is driven by innovation and digitalization. How are you embracing new technologies to spur growth and expansion?

MSM: We have 3 different approaches to innovation and to advancing the firm and bringing ourselves into the renaissance of insurance. Number one, we have an investment arm called XL Innovate which typically invests in start-ups that address emerging and underserved risks, disruptive new insurance models and data and analytic companies with high value insurance applications. Secondly, we have an internal group called Accelerate which is a group of people who act as a team in support of big ideas for internally driven innovation around our existing customers or product sets. Third, we pride ourselves on being innovative. We never stand still. We continue to look for ways to improve solutions and services for our customers, invariably as the world has taught them to do, expect more every year. Across those three approaches, we have three loosely coordinated approaches that help us into that future faster than anybody else.

PR: Innovation is key, and innovation happens in Bermuda. ILS is one of the latest innovation areas that has turned out into a success here. How do you scale your operations in this environment dealing with ILS?

MSM: The ILS marketplace and many of its associated developments are terribly important to how the world is going to work in the future. It is clear that traditional insurance and reinsurance balance sheets are insufficient for the future. We are going to need more capital of different kinds with different return requirements and that requires our underwriters and the people who imagine the future to think differently about the business model. That is where this marketplace comes from. We were one of the first to use alternative capital in addition to our own in the marketplace more than 20 years ago and we intend to continue to accelerate in this area.

PR: The America’s Cup has given a boost to the island. How is XL Catlin taken advantage of this global exposure and leveraging this great momentum?

MSM: As the insurance partner of the 35th America’s Cup we demonstrated the strength of our brand to a global audience of 363 million viewers. We also had the opportunity of entertaining some 550 clients and brokers during the five weeks of the America’s Cup in Bermuda. When you are in a marketplace like ours, where there are multiple parties in the value chain, to bring your key partners to such a special place and event, it is a really good way of endearing yourself to them. Of course all of that serves to raise the profile of Bermuda as an important insurance and reinsurance marketplace and to make people more aware of the astonishing beauty of the place as a destination as well. The fact that you have this vibrant marketplace and this magnificent place to visit, all being showcased at the same time, is a very powerful way to show the world what a unique place it is.

PR: Bermuda is the capital of insurance and reinsurance. A lot of people don’t know the importance of Bermuda in giving stability to capital markets. How would you say Bermuda is affecting global growth and providing confidence to markets to stabilize and bring about growth?

MSM: Without a doubt reinsurance and insurance are enablers. We are able to take on the risk of companies and provide them with solutions so that they can focus on what they do best. This accelerates civilization’s advance. Without insurance and reinsurance you would have to invent it so that these great minds out there, that create the future, can really focus their energy and not be afraid of all the bad things that can happen. That is a perfect extension of everything we do. That is why we say XL Catlin “Make Your World Go”. We stand behind clients so that they can use their capital and intellectual capacity to make the world a better place while we take care of the bad stuff. It is a very powerful role to play in the world.

PR: What new clients would you like to attract from this exposure through foreign policy magazine and how would you say you're diversified approach is different from others in the market?

MSM: When you are one of the handful of companies that can create seamless solutions across hundreds of countries, that by itself is a distinction of XL Catlin which we want to make sure that anyone that can benefit from our products understands and appreciates. When you get into this smaller class of insurers that do these extraordinary complex things, more than likely we are going to be brand names that come easily to mind. But for those who know what is going on in terms of innovation in our industry and who know who has real global capacity and who can truly take on complex risk, we are one of the few companies they can turn to, to make sure they can accelerate their success as well.