Charles Darwin’s Theory of Evolution is often mischaracterised as the survival of the fittest, whereas surviving and thriving are actually dependent on adaptability.

As a remote island with no natural resources, Bermuda has long embraced adaptability as part of its cultural DNA—not only to survive but to thrive. As we enter the third year of the COVID-19 pandemic, Bermuda is at the forefront of adapting not only to the pandemic but also to other areas of global importance including the new urgency in tackling climate change and other economic and socioeconomic shifts and risks.

As an integral part of the Bermuda market, the Bermuda Stock Exchange (BSX) celebrated its 50th anniversary in 2021 and continues to expand its role in supporting businesses and communities domestically and internationally.

Bermuda, long a centre of excellence and innovation for re/insurance, is set to continue in a leading role in providing capacity and expertise for the risk industry especially with the Island’s historical focus on environmental risk and resilience. The continued evolution of the insurance-linked securities (ILS) sector is seeing a shift to take on additional areas of the market including legacy natural catastrophe risks to free trapped capital as well as expanding into other sectors of the market such as cybersecurity.

At the end of October 2021, the BSX remained the global leader in the support and listing of ILS with over 700 vehicles listed representing approximately $50 billion or 95 percent of global issuances. As Bermuda forges ahead with being a centre of excellence for climate risks, the BSX is embracing the opportunity to assist the insurance industry by providing a regulated platform for exchange-traded risk (ETR).

Future focus

Having learned from the challenges a pandemic can have on operations, employee health and wellbeing, supply chains and everything that impacts business, 2022 promises a renewed focus on companies’ enterprise risk management (ERM) frameworks. Given all the pressures and external challenges that have been amplified because of the pandemic, regulators are now asking regulated entities to disclose more and provide policy clarity around their ERM frameworks.

Remote working and increased mainstreaming of crypto and digital assets have highlighted an increased focus on cybersecurity and online crime. In 2022 and beyond, ERM, as it relates to companies operating in the digital assets and decentralised finance (defi) space, will be a significant area of importance for businesses.

While the BSX continues its focus on the growth of existing business lines, especially in the re/insurance and ILS markets as well as international debt listings, the exchange, in partnership with parent company Miami International Holdings (MIH) is embracing the Bermuda government’s pioneering legislation—the Digital Assets Business Act (DABA)—as the Island works diligently to be a market leader in the development of digital asset strategies and defi.

With the support of MIH, the BSX is in a position to drive innovation in the ever-changing securities market landscape while supporting new commercial opportunities and changes within the industries in which Bermuda’s strengths are known.

The BSX is very much in step with developments in the jurisdiction and has supported innovative indigenous developments—be it ILS or digital assets—and touches every piece of business in Bermuda supporting not only the exchange’s corporate growth but also Bermuda’s efforts to develop leadership in these areas.

Given the ongoing rapid digitisation of so many aspects of corporate operations, and the exponential increase in cyber hacks and attacks, cybersecurity and the prevention of cyber-related crime in the exchange ecosystem will remain a heightened focus not only for the BSX but for all our colleagues in the global exchange space.