Chief risk officers have become firmly established within Bermuda’s re/insurance companies, a survey reveals.

EY’s first survey of the island’s insurance CROs found that 100 per cent of respondents had unfettered access to the Board, Risk and Audit Committees.

The picture painted by the survey is one in which CROs are an increasing influence on how companies are managed in a world of rapid technological and regulatory change.

CROs in Bermuda also expressed a greater level of satisfaction with the way the insurance industry is regulated, than did their counterparts in the US and Europe, where “regulatory intrusiveness has been a key theme for some time”, EY said.

The enhanced regulation introduced as Bermuda has become equivalent with the European Union’s new Solvency II regime poses challenges, Bermuda CROs said. However, they also “expressed their appreciation for the pragmatic and proportionate approach adopted by the Bermuda Monetary Authority in implementing Solvency II equivalence”.

Most Bermuda CROs said their value was not measured by hard metrics. One respondent said: “We stop value destruction. We don’t have formal metrics, but we have found things that others hadn’t in the past.”

Another said: “How can you prove that you have avoided what was avoided?”

Use of CROs’ time was largely skewed towards insurance risk, followed by operational risk.

Risk appetite remains an area for improvement with only 33 per cent of CROs believing their companies had reached full consistency between top-down statements and bottom-up limits.

“Insurance CROs in Bermuda are taking on an increasingly important role within their firm’s decision making process, growing their influence outside of the traditional risk processes and becoming a visible contributor at the executive table,” said Paolo Fiandesio, senior manager at EY and principal author of the survey.

“The rapidly evolving risk landscape and the regulatory agenda have undoubtedly enhanced the CRO role and standing, reinforcing the risk discussion at board level; CROs are clear on the need to ensure they are perceived as a ‘trusted partner’ to enable business success.”

Chris Maiato, EY principal and advisory services leader for the region that includes Bermuda, said: “As the CRO role continues to evolve, our participants are cognisant of the areas of improvement within their risk frameworks, ranging from ensuring a consistent understanding of risk appetite at all levels to striking the right balance between technology and skills within their functions.

“As the external risk environment continues to evolve, risk functions have the opportunity to enhance existing capabilities for the effective and efficient management of the new and evolving risks facing the insurance industry.”