A 21st Century outlook

“What stands out before my fresh eyes is this sector’s longstanding willingness to collaborate and share.”

First, a confession: I’m new to re/insurance. I’m a good swimmer, however, and where better to be thrown in at the deep end than the Bermuda Risk Summit. That’s where I headed for the third week in my new job as the editor of Bermuda:Re+ILS.

After 20+ years of covering the energy sector, I was no stranger to debates about climate change—from those I heard at COP6 in Bonn (2001) to the panel I moderated at COP25 in Madrid (2019). If anything has changed in that time it’s this: climate used to be a thread running through each sector, but now each sector is a thread running through climate. In other words, the credentials of a sector can be measured by how well it has been sewn into the fabric of the climate emergency.

An environmental, social and corporate governance framework, and a diversity, equality and inclusion strategy, are no longer ‘nice-to-haves’ but are essential to any business. The re/insurance sector, however, is better placed than most to be a trailblazer. Data is still king (and queen) at the court of risk finance, but how to manage it is changing.

As an old-school journalist, I’d never have admitted to feeling ‘privileged’ to interview a minister or a chief executive officer, but in Hamilton that’s exactly how I felt.

First, as a small island state, Bermuda has a profound understanding of the impacts of climate change.

Second, the breadth and quality of expertise and intellect that is concentrated in such a tiny space on the map makes Hamilton the human equivalent of a supercomputer. Third, innovation is in the DNA of the Island’s international business community. These three points add up to the conclusion that Bermuda is the obvious place to become the world’s climate risk capital.

The way forward

The Summit coincided with our emergence (we hope) from the COVID-19 pandemic and also with Russia’s invasion of Ukraine. It was no surprise therefore that a recurring theme of the Summit was systemic risk. Pandemics, inflation and climate change are such risks, but so too are terrorism and cyber.

Moreover, Putin may have a 20th Century approach to warfare (so far), but the West is already using a modern arsenal—economic sanctions and (for the good of the planet, ultimately) an accelerated move away from fossil fuels. It is in this context that the re/insurance sector is showing its agility, by taking a fresh look at the ‘uninsurables’.

As I started this new job, I got to forage the seashore after the latest wave of new entrants: the Class of 2020. It’s clear, even to a newbie, that this group is different from what’s gone before. Another feature of Bermuda’s evolution that was on show at the Summit was the growth of the life sector to its status as one of the Island’s economic pillars.

Finally, what stands out before my fresh eyes is this sector’s longstanding willingness to collaborate and share—among yourselves as well as across sectors, marketplaces and jurisdictions. I’d say that’s actually a very modern approach to business but now it is also vital. Thank you for having me.