A Convergence 2024 audience has heard of plans by the State of Louisiana to affect a “reinsurance and an insurance renaissance in Louisiana”.

Tim Temple, the state insurance commissioner elected a year ago this month, is eager to create a regulatory and statutory environment that ensures competitiveness, but also enhances the attractiveness of Louisiana's insurance market.

This after the state has had its own storm problems in recent years, including last month from Hurricane Francine, which brought record rainfall and extensive flooding in some areas.

Property owners across the US are facing less coverage and higher rates, but none as much as Florida and Louisiana.

Politico reported recently how severe the insurance crisis is in Louisiana, where homeowners’ policies were sky high - only second to Florida.

The ILS Bermuda Conference at Hamilton Princess & Beach Club included discussions of attractive jurisdictions like Bermuda and London where business is being lured to allow some measure of regulatory freedom to be creative in furthering insurance solutions, under the appropriate microscope of regulatory scrutiny.

The panel was entitled “Sandboxes, Reforms and a Return to Basics: How Regulatory Innovation Can Promote Adaptation, Mitigation and Protection Gap Reduction”.

A Bermuda regulator told the gathering that innovation is at the heart of Bermuda’s insurance and reinsurance market.

George Alayon, deputy director of the Bermuda Monetary Authority’s fintech department and the leader of its insurance innovation team, said: “Bermuda doesn't know any other way but to innovate. And we've been doing that since the invention of captives in the 60s.”

He spoke about the BMA’s regulatory sandbox and innovation hub, which he called “its two pathways for innovation”.

Mr Temple and Mr Alayon were joined by Rosie Denée, who heads up Innovation and Commercial Education and Engagement at Lloyd’s, overseeing the organisation’s innovation efforts.

The panel was moderated by John Huff, president and chief executive of the Association of Bermuda Insurers and Reinsurers.

A discussion of a real-world outcome of the BMA’s sandbox and Lloyd’s Lab’s support of innovation that relate to ILS and climate resilience in particular, was Kettle, the reinsurance company that uses advanced deep learning to better protect people from the growing risks associated with climate change, and which graduated from the BMA sandbox, and is now a fully licensed entity.

In 2022, Kettle also participated in the Lloyd’s Lab ten-week accelerator programme, which next year will feature a cohort with a Bermuda focus, the result of a memorandum of understanding this year by Lloyd’s and the BMA to promote innovation and collaboration in the international insurance market.

Ms Denée spoke about Lloyd’s as both a market and a regulator, and the separation between the oversight function of Lloyd’s and the innovation function of Lloyd’s Lab.

She said: “In our interactions with the marketplace I think one thing which is really palpable is that they're not dealing with Lloyd’s. It’s a different brand. We have our own logo, we have a separate space in the Lloyd’s building.

“You come into the lab and the energy is high. Everyone comes from the other corporation floors and they're like, oh my God, people are talking. But you know, people are talking, people are creating, there's really ideas being driven left, right and centre.

“I run, and oversee, everything in the innovation side and I'm definitely not the person who’s governing or overseeing the actual day-to-day underwriting.

“It's a very separate conversation and I think that provides this really big kind of feeling of safety in it. You’re not burning political capital with me by coming to actually experiment and failing in my space. Everyone knows it’s a really supportive environment.”

But Mr Temple noted the protection gap issue being faced by his state.

He said: “My interpretation of protection gaps in Louisiana is affordability. And you hear the three A’s, availability, affordability and accountability.

“After we had those four hurricanes starting in August of 2020, we had 12 companies go insolvent. We had more than two dozen effectively stop writing. And so that impacted the availability.”

After a decade of no storm impacts, Mr Temple said, some companies had “chased the premium down below adequate”, and he now needs industry support to “help people understand what the true pricing needs to be”.

He said his goal is to have a “reinsurance and an insurance renaissance in Louisiana”.

Mr Temple said: “If you're looking at innovation, doing any type of insurance innovation, I want Louisiana to be a state you consider.”