resources: bermuda

Well, this looks like an, er, interesting idea.

> ReSources (Bermuda) provides insurers and reinsurers locally and overseas with a range of management capabilities during peak seasons or whenever extra help is required… [It] will provide production, underwriting, and audit services to Bermuda’s insurance and reinsurance sector, and to companies overseas, on an outsourced basis. The new company might be described as a means of temporarily expanding a client’s abilities to allow them to achieve greater reach when an opportunity presents itself.

Right. I don’t mean to sound cynical and I’m sure that ReSources is run by people of unimpeachable credentials, but you can just see the inherent difficulties and conflicts here.

First, outsourcing your underwriting is, in my view, a Pretty Bad Idea generically. To do it at peak times – i.e. when your regular staff are over-stretched and thus cannot give their attention to any business beyond their own – seems doubly dangerous. God knows, the problems are difficult enough when you have a plain old MGA but when it’s a temporary, expedient MGA I can only see the problems multiplying.

Second, I think the potential for conflict of interest seems pretty high. As a business model, unless they are going to have very few clients indeed, there are almost inevitably going to be times when they are chasing the same piece of business for more than one client. Now that might be OK if there’s enough to go round, but not if not.

Third, one can see perhaps (perish the thort!) that some less scrupulous brokers might target the hired gun underwriter with less than savoury business. Well, it’s been known to happen…

So, all in all, my instinct is to approach the concept of such services with a little care. I am sure that Messrs. Smith and Underwood are of the highest calibre, but all the same the whole notion seems to me potentially appealing to lawyers. Like me.

On second thoughts, Vas y!