BERMUDA
10 key Bermuda moments
This year the financial hub and risk centre of Bermuda showed it has big ambitions for the future. We highlight 10 key events in 2022 that have moved the Island closer to its goals.
Bermuda’s ambition to build on its status as the world’s risk capital and become the capital of climate risk finance has been a theme all year. From the inaugural Bermuda Climate Summit at home to its role at COP27 in Egypt where it shared its risk expertise, re/insurers domiciled on the Island have credentials aplenty to take up that mantle.
However, there is a lot of work to do first, which is why global companies and associations have spelled out the challenges ahead as well as urged the industry to realise that the opportunities are potentially game-changing for the traditional understanding of insurance.
In the last year there have been many moments on the path to further elevating Bermuda’s already much valued status—we’ve highlighted 10 of the most important here.
1. Face time
In-person events that the whole world had taken for granted pre-March 2020 resumed in 2022, meaning Bermuda could once again host its headline conferences. This year marked a welcome return for physical events including the Bermuda Risk Summit, the Bermuda International Life & Annuity Conference, and ILS Bermuda’s Convergence. An extra special moment on the calendar was the inaugural Bermuda Climate Summit, where David Hart, chief executive officer of the Bermuda Business Development Agency (BDA), described perfectly the historical significance of Bermuda’s ambition to be the leading jurisdiction for climate risk finance.
2. Landmark ESG findings
It was at the Bermuda Climate Summit that Oxbow Partners, a specialist management consultancy for the insurance industry, launched a landmark environmental, social and governance (ESG) report in partnership with the BDA. It assessed the maturity of ESG in the Bermudian re/insurance market.
Miqdaad Versi, Oxbow’s head of ESG and author of the report, said: “The fundamentals of what re/insurance is all about—risk transfer—make this a very positive industry to invest in, but that’s not necessarily understood and appreciated by some of the ESG scoring teams.”
Image: Shutterstock.com / Vitaliy Kyrychuk
3. Critical cat questions
Our own in-person meetings were also in the diaries of the Island’s top executives. Our series of roundtables on all things finance culminated in our Bermuda Finance 2022/2023 magazine, now in its 15th year. ESG, diversity and inclusion, insurance-linked securities (ILS), life, legacy, insurtech—it’s all there.
Managing editor Wyn Jenkins detailed the many reasons to be positive about Bermuda, concluding that: “Never before have we done so many roundtables, featuring so many senior people from all parts of Bermuda.”
Another firm fixture on the Bermuda:Re+ILS calendar was our roundtable at Rendez-Vous de Septembre in Monte Carlo. Against the backdrop of continued dislocation in the property-cat markets, with capacity pulling back and rates continuing to increase, we asked senior executives what role Bermuda’s carriers can play. The key question came, not from us, but from one of them: “What’s the tipping point?”
4. Ian induces déjà vu
Bermuda’s executives lost their enthusiasm for speaking to journalists after Hurricane Ian, preferring to assess quietly the size of impact this category 4 hurricane would have on their 1/1 renewals. A flurry of third-party estimates of insured losses ensued, while BDA chair Weinstein pondered the strong sense of déjà vu and asked: If, after Hurricane Andrew 30 years ago, Bermuda went on to become the world’s risk capital, could 2022’s Hurricane Ian herald the Island’s future as the leader in climate risk?
Weinstein is certain that: “Closing the insurance protection gap for climate perils is the most significant economic opportunity in front of us.”.
“Closing the insurance protection gap for climate perils is the most significant economic opportunity.”
Stephen Weinstein, BDA
5. Unprecedented opportunities
Someone who understands the protection gap better than most is Ekhosuehi Iyahen, secretary general of the Insurance Development Forum. Iyahen highlighted that a report by the United Nations Development Programme had included the role of insurance as one of three key pillars necessary to prepare societies for the ups and downs of an uncertain world.
“This is unprecedented. It is a challenge and an opportunity that the industry must respond to, in partnership with the public sector,” she said. An important illustration of such partnership is the recently launched Global Shield against Climate Risks, which heralds progress in climate adaptation and resilience. The InsuResilience Secretariat explained how.
6. ILS market matures
ILS Bermuda celebrated its 10th anniversary, which was a perfect opportunity for us to speak with its new chair, Jo Stanton, on the status of the ILS sector. Stanton noted that the Bermuda Stock Exchange lists more than 90 percent of total global ILS issuance.
“The market is certainly maturing—we used to talk about the convergence of capital markets and the risk industry. But now investors understand the asset class and have become a stable and embedded part of the reinsurance industry,” she said.
ILS Bermuda’s Convergence conference highlighted the challenges facing the sector, not least how to maintain the confidence of investors.
Image: Shutterstock.com / jo.pix
7. BILTIR expands focus
Bermuda International Long Term Insurers and Reinsurers (BILTIR) gained a new chair this year and expanded its focus to overseas. Natasha Scotland Courcy, senior vice president, chief operating officer and general counsel at Athene Re, succeeded Sylvia Oliveira, BILTIR’s first chair. The advocacy group tasked a new committee, led by John Hele, president and chief operating officer of Resolution Life and a BILTIR board member, with enhancing international engagement.
Hele explained the need to maintain BILTIR’s active engagement with other jurisdictions about the Island’s strengths as one of the largest and most sophisticated commercial re/insurance marketplaces in the world.
8. Regulating AI
We also caught up with another new leader—of the Bermuda Monetary Authority (BMA). Craig Swan became its new CEO and chairman in October last year, succeeding Jeremy Cox. Swan shared his perspective on what defines Bermuda as a world-class jurisdiction. He said: “Throughout my 16 years with the BMA, I have witnessed this mentality in our staff, and in my first year as chief executive officer, we further galvanised it.”
The BMA’s enthusiasm for staying ahead of the regulatory curve by embracing innovation is legendary. The latest example of this is its report on artificial intelligence (AI) and machine learning, in which it says the next five years will be about ensuring regulatory frameworks “remain credible and fit for purpose” in the digital world.
“The BMA’s enthusiasm for staying ahead of the regulatory curve by embracing innovation is legendary.”
9. Changing of the guard
The baton of CEO has changed hands at a good number of Bermuda-domiciled companies this year, too many to mention, but they include Abigail Clifford, who became the first woman to lead century-old BF&M, and SiriusPoint’s Scott Egan, a former CEO at Royal Sun Alliance.
One that was a foregone conclusion but nevertheless took us by surprise, was Convex Group’s Paul Brand, who founded the business in 2019 with Stephen Catlin, becoming group CEO. We spoke with Catlin just before that announcement, at his office in Lime Street, London.
10. COP27 imperatives
We end as we began, with climate. If ever there was a time for re/insurers to seize the moment, COP27 showed quite clearly that it is now. Butch Bacani, who leads the UN Environment Programme’s Principles for Sustainable Insurance Initiative—the largest collaboration between the UN and the insurance industry—was front-and-centre of our coverage of the climate talks in Sharm el-Sheikh.
Bacani stressed that climate change is not the only planetary crisis we are facing, and that insurers need to be sustainable across all of their three roles—risk manager, insurer and investor. Crucially, he said, the sector’s expertise in weather risk isn’t enough because “the past is no longer a reliable indicator of the future”.
The BDA’s Hart was also at COP27 and wrote for us his compelling message to Bermuda’s re/insurers.
Image: Shutterstock.com / rafapress
Main image: Shutterstock.com / Darryl Brooks
