Bermuda re/insurance & ILS sector growing on ESG: Ocorian –

With environmental, social and governance (ESG) issues growing in Bermuda, Sherman Taylor, Ocorian’s Head of Capital Markets in the country, shared his thoughts on the matter as part of Artemis’ Q2 2022 Catastrophe Bond & ILS Market Report.

“Corporate culture based on environmental, social and governance (ESG) issues is growing rapidly in the global stock market, with insurance emerging as a strong area of ​​influence in business decisions,” said Taylor.

“There is an increasing number of divestitures and restrictions in the international (re)insurance market as a direct result of ESG and this has not been spared in Bermuda. Many of the world’s (re)insurers have publicly announced that they have withdrawn or restricted assets and projects related to the industry such as fuel.

“These companies are under pressure to change their neutrality, because many stakeholders are motivated by financial responsibility.”

Taylor explained that, although ESG has yet to be incorporated into Bermuda law, ESG policies designed to meet and exceed international standards are already in place.

In addition, Bermuda itself participates in international ESG efforts and in May 2022 Bermuda hosted the inaugural climate summit, which attracted thought leaders on climate risk from around the world, Taylor said.

He said: “Bermuda corporations, including Ocorian, are not in line with international companies, many of which have developed their own ESG business policies.

“The Bermuda Monetary Authority (BMA), which oversees insurance and ILS in Bermuda, is working to integrate key issues – climate change in particular – into its regulatory framework.

“The hope is that the BMA will consider the risks, opportunities, and capabilities and ultimately provide the insurance sector with comprehensive guidance on ESG management.”

According to Taylor, this could include boardroom anticipation, risk management and self-assessment to consider the risks of climate change.

In addition, he highlighted “proud examples” of ESG practices in Bermuda.

They include: “[Bermuda’s] committed to an 85% reduction in fossil fuel use (and replacement with renewables) by 2035 and the government and several corporations have already invested in solar technology.

“Electric car wash stations have been installed all over the island and new electric buses will start operating soon. Elsewhere, there is an island-wide tree planting program that aims to remove invasive species, increase resilience to climate change, and improve biodiversity.

He added: “Importantly, the ILS industry in Bermuda stands out for a number of reasons including the speed of the market, high costs, large insurance pool and limited performance.

Bermuda’s regulators often provide appropriate legislation that effectively protects policyholders while still maintaining business on the island.

“This explains Bermuda’s emergence as a leader in the international ILS market and as the island looks to a brighter future with ESG regulations on the horizon, there is a guarantee that the factors that make Bermuda attractive will continue to improve.”

Regarding insurance solutions, Taylor said: “The Ocorian Group provides comprehensive support to the ILS and captive market from our offices in Bermuda, Cayman and BVI, ensuring that all structures comply with the applicable laws in each jurisdiction.

“We add value throughout the life cycle, from incorporation and certification to the voluntary release and closure of a building at the end of its natural life; precision and technical expertise have always been hallmarks of the services we provide to important companies around the world.”

Read the full article and download the full Artemis Q2 2022 Catastrophe Bond Market report here.

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