INNOVATIVE BERMUDA ADAPTS TO CHANGE

If you look at how the tech companies have fared over the last three to six months, since the March downturn, there has been a real acceleration of those companies that have a very strong digital strategy.

Apple recently crossed the $2 trillion mark, and the technology industry has emerged much stronger compared with the retail, hospitality or travel industries that are all struggling..

It is going to be a different new economy that emerges, and for Bermuda to succeed it has to play a role now for those companies that have accelerated. There was a comment by one of the tech CEOs that we’ve seen 20 years of accelerated digitisation in the last six months.

That’s a real opportunity for us, but what do we need to do now to ensure that we can build a framework, a business opportunity, a landscape for those companies that will want to come to Bermuda with their digital strategies going forward?

I don’t have all the answers, but I do see a different economy emerging and Bermuda has to look forward and adapt, and that will be the real positive opportunity for Bermuda.

But what is the work force? What does the work force of the future look like and how does that impact the Bermuda economy? We’ve all done staff surveys as to who wants to stay home and who doesn’t, and it’s staggering the high percentage of people wanting to work from home.

But the next question is: ‘If I can hire the same person 2,000 km from here for a quarter of the price, why do I have them here?’.

It’s a double-edged sword. Part of the strength we have is the ability to fuel the local economy, and empower the local workforce, but if my workforce can work from home, then I’m not so sure I need to hire them on Bermuda.

So what are the incentives for people to be here? Sure, I keep a core here and my economic substance is important but this is now one of the future challenges that Bermuda is going to have to cross. How do you keep people here? How do you attract them and how do you keep them here in a way that makes sense?

The jury is still out about how many people are going to work completely remotely, what it’s going to look like in the future or whether it’s going to be a hybrid model, and for that Bermuda has always had the ability to adapt very quickly.

But if we extend our thinking, what’s the future of our local workforce going to look like? That’s something that we need to think about.

Nicolas Plianthos: There are things out of our control but it’s very encouraging to see that Bermuda has done almost everything that it can to innovate and adapt, and I have no doubt that it will continue.

The financial services and the tech sector are doing fantastically, but there is a whole lot of other industries that are struggling and will struggle for a very long time, and what will that mean for Bermuda’s and the world’s future? How will Bermuda factor in solving basically the world’s problems?

Richards: Climate change is another area where Bermuda’s role has probably never been more globally relevant. In our view, the effects of climate change could create the potential for unprecedented cat losses in the coming years.

Bermuda has a very deep expertise in cat reinsurance and also in the science of natural catastrophe risk management, and that makes it an ideal champion in the efforts to increase insurance coverage in disaster-prone and developing countries that often lack it.

Adderley: I agree with Andre’s point: we don’t know where the staff are going to be but if we start seeing the senior decision-makers coming down to Bermuda for this one-year work permit, being on the Island, then that will encourage them also to put more roots on the island, and will help to ensure that we hire a couple of people.

Bermuda will never again have the likes of big companies like ACE and XL employing hundreds of people in Bermuda, but we can handle 100 companies with three people here. The biggest expense that you have in Bermuda is office space, plus staff. So if you can have people working from home, they don’t need the office space and you’ve got the decision-makers in Bermuda, hopefully, then that works.

It comes down to whether we can get the senior people from the East Coast, inland, move to Bermuda, whether it’s for COVID reasons, safety reasons, family reasons, and good planning, good financial planning and leave it like that.

Richards: Bermuda’s involvement in the public-private sector collaboration to close the protection gap is another area for potential innovation.

Here, the industry is looking to find ways to optimise and extend the use of insurance and risk management to build greater resilience and protection for people and communities, businesses and public institutions.

This is an area in which Bermuda is well placed to lead the charge.

Plianthos: Bermuda needs to keep its eyes and ears open on what the competition is doing. If you think about the ILS space, Singapore has extended its grant for the ILS industry.

Hong Kong is tabling ILS legislation so we can’t rest on our laurels. Competition is always a big factor in this day and age.

Faries: About Lloyd’s and its approach on ILS, part of the challenge they had was having the intellectual capital to service that business. That takes time to build up.

I would say that Bermuda still has an advantage in terms of all the companies and the services you need to execute on a good idea and we need to continue to capitalise on that strength.

We’ve got that intellectual capital and it is sitting in Bermuda, which is a huge advantage.

One thing I would add though, through the fintech and insurtech advisory work I’m doing, is that Bermuda is still somewhat closed to the rest of the financial market.

One of the things I’m encouraged about is the Bermuda Stock Exchange (BSX) being bought by the MIAX Exchange Group.

We automatically then have in the BSX a wider infrastructure that we can start to leverage in a variety of ways.