Bermuda’s P&C insurers more reliant on individuals to manage ESG risk

Written by Adam Cadle

13/05/2024

Bermuda’s P&C insurers rely more heavily on a single individual, such as the CRO, to manage ESG risk overall than long-term insurers, a survey by the Bermuda Monetary Authority (BMA) has revealed.

Out of 114 insurers in the Bermudian insurance market, the BMA found that nearly a quarter indicated that the CRO manages both ESG strategy and risk. Several insurers (12%) indicated they have a dedicated ESG officer, who is the senior-level decision-maker responsible for strategy, risk and goals. The officer often works in collaboration with the CRO.

The majority of insurers (93%) indicated that they incorporated ESG risks into their ERM strategy to some extent. Almost half of them (48%) have a stand-alone overarching strategy incorporated in ERM processes. According to the survey, 26% of companies consider ESG risk in the ERM only, while 18% of the market indicated their strategy is under development. Nearly half of those in the process of incorporating ESG risks into their ERM frameworks indicated that tangible plans are in place to complete these processes by the end of 2024. In the limited cases (7%) where an entity does not implement an ESG approach, this is either due to having assessed the risk as not material or the insurer not yet finalising the initial assessment.

Approximately one-third (31%) of organisations surveyed have completed a formal materiality (impact) assessment to drive the focus of their ESG efforts. For the majority of the industry, the biggest advancements and focus remain on climate change and DEI. Close to half (42%) of the organisations surveyed have not done a materiality (impact) assessment.

“This could be an area of focus for the insurance industry in the future particularly for the purpose of effectively limiting material risks and being able to seize upon opportunities as sustainability approaches evolve,” the Authority stated.

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