Bermuda can lead the world in tackling the challenges of climate risk, a leading insurance executive told a sold-out audience at the inaugural Bermuda Climate Summit yesterday.
Speaking of climate risk on a macro level, Hamilton Insurance Group CEO Pina Albo said: “There is an opportunity for Bermuda here to really put its face on the map, to lead on the topic of climate, how to improve resiliency, how to mitigate the risk, how to underwrite the risk, and how to make statements with how we are running our business.”
“That is the one aspect, but more importantly I look at what risks actually should we be targeting to write. There, there is an increased emphasis and a real opportunity in more sustainable and green technology and that’s where we are placing a lot of our emphasis on the underwriting side.
“On the investment side, making sure that your investments also make a statement is important and I think something that we can do and an opportunity that we have.”
Ms Albo, deputy chairwoman of the Association of Bermuda Insurers and Reinsurers, was speaking on the panel CEOs, Climate and Capacity, moderated by Jeffrey Manson, head of global public sector partnerships at RenaissanceRe and chairman of the climate committee at Abir.
The panel also included Marc Grandisson, CEO of Arch Capital Group and chairman of Abir; Lara Mowery, global head of distribution at Guy Carpenter; and Tim Neilander, senior legal adviser at African Risk Capacity Group.
Mr Grandisson said: “Bermuda is really willing to innovate, to think outside of the box.
“It’s a very different place, where you can as a broker, as a client, go around a small area of the world and really meet decision-makers.”
He added: “We still have this entrepreneurial, innovative spirit in Bermuda, which I think is very important. It tells whoever wants to cede risk, or share risk, Bermuda is open for business, always open for business.
“We’ll try and find a way to make it work the best we can.
“This is a place where new things can evolve and happen, and that is largely due not only to the BMA, which provides a great regulatory framework, but the people.”
An example of Bermuda’s strength as an innovator was given by Dr Neilander, of the African Risk Capacity Group, which set up a hybrid mutual insurance company, ARC Insurance Company Limited, in Bermuda in 2013 to serve 35 African Union member states.
He said ARC searched for a jurisdiction with a regulatory environment suitable for issuing insurance policies to sovereigns.
Bermuda was chosen, and ARC was the first African risk insurance pool, reducing governments’ reliance on external emergency aid.
Ms Mowery said the ARC story was a prime example of an industry solution produced in Bermuda.
On the topic of climate risk, she said innovation must be accompanied by a degree of certainty and comfort for participants.
She said: “As we are thinking about and narrowing the focus a little bit to capacity in the space, how do we get reinsurers to engage and dedicate capacity to climate protection when climate change increases volatility in results?”
Ms Mowery added: “The better risk framework that you can put around these things as they are evolving and developing, the more comfortable capital is going to be, to say, ‘Yeah, I’m going to take that chance and I’m going to invest in the space’.”
At Hamilton, she added: “On the underwriting side, I look at what risks do we write, should we be writing them, and how should we be writing them?