A survey conducted by the Bermuda Monetary Authority (BMA) has found that major re/insurance firms operating in Bermuda are integrating environmental, social, and governance (ESG) considerations into their risk management strategies.
The “Bermuda Insurance Market Sustainability Results Report 2023,” which presents findings from the 2023 ESG survey, indicates robust engagement with corporate social responsibility across the sector.
The BMA’s survey reveals that nearly half of the firms (48%) have developed a standalone ESG strategy, while others incorporate these considerations into broader risk management frameworks.
Notably, 70% of companies delegate ESG strategic responsibilities between their boards and chief executives, while leaving the risk-focused aspects to their chief risk officers.
The survey also highlighted that approximately half of the industry has conducted assessments to pinpoint specific material ESG risks. The areas where progress is most apparent include climate risk management, with 59% of respondents fully integrating these risks into their frameworks and another 27% currently doing so.
Aside from climate risks, the industry is also focusing on expanding its approach to include diversity, equity, and inclusion (DEI). According to the report, there is a significant effort within the industry to address the insurance protection gap, with 46% of insurers developing strategically aligned products or approaches to close these gaps in various sectors.
For the property and casualty (P&C) sector, natural catastrophes (nat cat) and cyber risks are seen as the most significant areas of the protection gap. In contrast, life and health (L&H) insurers identify pensions and health as critical areas.
In terms of DEI, 83% of the firms surveyed are either developing or have already implemented a DEI strategy. The survey found that 64% of these companies have formal DEI policies, and such considerations are increasingly important in recruitment and succession planning. Specifically, 77% of firms consider DEI a crucial factor in selecting candidates for senior management and board positions, with 90% focusing on gender balance during board appointments.
The report concludes that while there is clear progress, challenges such as limited talent pools in a competitive market remain obstacles to fully realizing DEI goals within the industry.
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