Hi-tech is the key to ensure the island’s reinsurance industry can compete with new business models, an expert said yesterday.

Arthur Wightman, leader of financial services firm PwC and regional insurance and markets leader, explained: “While most reinsurers have embraced change to support incremental innovation, bigger breakthroughs are necessary in order to compete with the new technologies and business models that are disrupting the industry.

“Investment in products and technologies that sharpen the precision of risk selection and pricing, but also improve the overall operations, efficiency and effectiveness will be crucial for companies looking to differentiate themselves.”

Mr Wightman was speaking on the eve of the Bermuda Reinsurance conference, sponsored by PwC and ratings agency Standard & Poor’s, to be held today at the Hamilton Princess.

The conference, themed on “reflection, realignment and relevance” is expected to pull in more than 250 attendees, including representatives from the UK and US.

The conference, the eleventh of its type, takes place against a backdrop of a prolonged downturn, shifting customer expectations and profits under threat from alternative capital and new insurance technology entrants to the business.

Delegates will look at how to keep pace with a changing environment and disruptions to the traditional ways of doing business.

In addition, panel discussions will focus on what the future might hold for alternative capital, mortgage reinsurance and emerging opportunities in insurtech and blockchain technology.

Other panels will look at promoting diversity in the industry.

Ben Bubeck, managing director and lead analytical manager at North America Financial Services Ratings, said: “Reinsurers are facing a challenging environment that may ultimately prove to be transformative for the industry.”

He added: “Reinsurance pricing declines may have slowed, but with no sign of a rebound, coupled with disappointing investment returns, reinsurers’ earnings sustainability may ba tested.

“Additionally, while reinsurers are currently well-capitalised, competitive landscape changes necessitate analysis into what these companies are doing to manage risk and continue to add value to cedants and insurers by providing protection against new and evolving risks, which may include exploring further consolidation and capitalising on new opportunities, such as mortgage reinsurance and within insurance-linked securities.”