FOREWORD
COMMITTED TO PROGRESS
Bermuda is the ideal environment for the provision of innovative climate risk finance solutions, writes the Hon Curtis L. Dickinson, MP, Minister of Finance.
“The climate risk finance space is a natural extension of what we already do.”
The Hon Curtis L. Dickinson, Minister of Finance
Since the beginning of the COVID-19 pandemic, the government of Bermuda has moved promptly to ensure the health and safety of our Island while also proactively taking action to mitigate the devastating economic impact.
We are committed to progress our work in a considered and prudent manner to successfully navigate Bermuda through the various challenges we face, combining economic success with social responsibility. As part of that, we must find ways to grow and diversify our economy.
With the greater global focus on environmental, social and corporate governance (ESG) matters, including recognising the importance of addressing climate change-related matters, establishing leadership in the area of climate risk finance is a priority focus that builds on a strong and well-established foundation.
The shift toward ESG investing has been a positive development, causing companies to move away from the single-minded focus on quarter-to-quarter earnings and encouraging them to consider the impact of their actions on the broader global community.
Bermuda has for many years put a strong focus on broader environmental matters, continually progressing its work to address social issues and developing governance requirements and standards through corporate and financial services regimes. We have been a leader in creating a robust business environment for the world’s insurance risk markets to innovate new finance solutions, and I believe we are well positioned to be the premier hub for climate risk financing.
The Bermuda market has deep expertise in catastrophe risk finance. We are fortunate that we have a large number of insurance and reinsurance companies based here, many of which, especially participants in the property and casualty sector, already provide coverage for catastrophes worldwide.
Bermuda is also the global leader in issuing insurance-linked securities (ILS), particularly catastrophe bonds. The “climate vertical” complements Bermuda’s globally recognised strengths in re/insurance and ILS which, together with a strong network of on-the-ground professional services providers, climate scientists and third sector participants, makes Bermuda an ideal environment for the provision of climate risk finance solutions.
“The actions being taken by Bermuda are consistent with our work to diversify our economy.”
Moving forward
As we advance, the Bermuda government’s initiatives on climate change include reducing the country’s carbon footprint and continuing to protect Bermuda’s fragile ecosystem. We will be increasing adaptability and resilience, mainly investing in climate-focused efforts by taking steps to further develop Bermuda’s role in climate risk finance.
From a regulatory perspective, our supervisory approach is sound and practical, and it caters to innovation. The Bermuda Monetary Authority (BMA) has established a regulatory sandbox and an innovation hub. Within specific regulatory parameters, the sandbox allows the testing of new technologies and the offering of innovative products, services, and delivery mechanisms to a limited number of clients, for a limited period, before licensing.
The innovation hub facilitates interactions with the BMA by entities seeking to develop innovative products and technologies. These initiatives provide a conducive environment for entities to develop innovative and appropriate climate risk finance strategies and products and otherwise address climate change.
Bermuda has the key ingredients to foster success and make a significant contribution in the areas of paramount importance to the future of our global community. We have considerable experience and expertise and a reputation for sound and robust regulation. We have soundly demonstrated our commitment to a culture that supports and promotes innovation.
We will address central needs in key markets and close the global protection gap, while creating new economic growth opportunities. The climate risk finance space is a natural extension of what we already do.
Governments worldwide must address the effects of climate change. It is an urgent economic, social, and environmental imperative that will have dire consequences on our planet and its inhabitants if we do not appropriately tackle it. Bermuda is committed to playing a key role in this effort.
The actions being taken by Bermuda are consistent with our work to diversify our economy. Therefore, the government will continue with our programme to foster Bermuda’s leadership position in climate risk finance to ensure a brighter, better future for all.
Image courtesy of Shutterstock / Viktor Hladchenko
