When it comes to climate change, hurricanes are a problem, but humans are a bigger one, a risk expert said at the 2023 Bermuda Risk Summit.

In the Future of Risk Panel on Wednesday, Tom Johansmeyer, head of PCS at Verisk, said: “You will see, in the next couple of years, the notion of renewable energy resource conflict, which sounds counter-intuitive, but there are some parts of the world where only wind farms, geothermal or solar makes sense.”

He said people could start fighting for access to wind and solar power.

“Water worries me the most,” Mr Johansmeyer said.

He pointed to Greenland as a potential source of human catastrophe in the next two decades.

Scientific American magazine reported last year that rising air temperatures are working with warm ocean waters to speed the melting of Greenland’s seaside glaciers, faster than anyone thought.

“There are 56,000 people in Greenland who speak five very different dialects,” Mr Johansmeyer said. “The country has no ability to bring in major foreign immigration. They have 93 miles of road and only 56 miles of them are paved. And that is where most of the world’s untapped resources are.”

Panellist Susan Pateras, independent director of the Bermuda Business Development Agency, said the world is seeing an increasing destabilisation of economies due to social injustice-triggered unrest.

“That is not reserved for what we used to call ‘the Third World’,” she said. “Just from reading the newspapers, it is clear that the more interconnected we are the bigger the outcome of the risk in today’s time.”

Mr Johansmeyer said war exclusions — common in insurance contracts since the 9/11 terrorist attacks — have been the biggest mistake the insurance industry has made from an environmental, social and governance perspective.

He estimated that there has been a $25 billion, industry-wide insured loss since the Russian invasion of Ukraine began a year ago.

“If we are talking about helping countries rebuild after human disaster, armed conflict is at the top of the list,” Mr Johansmeyer said. “It is manageable as demonstrated. It is recoverable and it is where we can make a difference. But we see conflict and the first thing we do is exclude?”

Panel moderator Gero Michel, AIG Re head of risk analytics, questioned why everyone seemed so surprised by the Ukraine invasion when it had clearly been coming for some time.

Andrew Smith, chief risk and sustainability officer at Conduit Re, said events such as Covid-19 and the Russian invasion of the Ukraine were not unforeseen, but no one could have predicted exactly when they would happen, or how severe they would be.

“Bullet point one is that we underwrite what we understand,” Mr Smith said. “Because of that we are all funnelled into a narrow field of areas where there is sufficient data for us to form a view. The market price is based on those views.”

Julia Mansfield, head of customised at Arch Reinsurance, said the insurance industry can sometimes be very insular when defining what is on the horizon.

“Often it is not through talking to another insurance professional that you become better informed,” she said. “If you have that diversity of thought at the table you will make better decisions.”

Ms Pateras said the insurance industry could be slow to change, but she loved the way it can play a key role in putting communities back together after a disaster.

“We have entrenched deep knowledge in our sectors, but sometimes that can make our view quite narrow,” she said.

She said it is important to have cross-professional teams, and people who have sat in different seats across an organisation, and also a portion of the balance sheet reserved for research and development.

The 2023 Bermuda Risk Summit, held at the Hamilton Princess and Beach Club was organised by the BDA in partnership with the Association of Bermuda Insurers and Reinsurers, EY, and Gallagher Re. The three-day event closed on Wednesday.