While Bermuda has a strong regulatory framework, it will not continue to be as effective without the right people, Craig Swan, the chief executive of the Bermuda Monetary Authority, told industry leaders at the Bermuda Risk Summit.

“Without talent, it’s like having a Ferrari racecourse and only high school students to drive the cars,” he said.

During a panel discussion at the Hamilton Princess Hotel and Beach Club, Mr Swan compared the unpredictable nature of global risks to a famous movie quote: “’Life is like a box of chocolates – you never know what you’re going to get’. And essentially, that's the life of an insurer but it's also the life of a regulator.”

To meet the challenges, the BMA has started to expand beyond traditional actuarial and accounting roles.

“We’ve had to hire those with actuarial skill sets, asset specialists. We have to pair them with data scientists, with persons who understand machine learning, artificial intelligence and the like,” Mr Swan said.

“Even actuaries, years back, were primarily reserving specialists. Now, they are model specialists and the challenge for the regulator is that all of these are in high demand.”

He said one of the BMA’s top priorities was ensuring that Bermuda’s financial system stayed resilient by monitoring emerging risks and taking steps to mitigate them.

“Since 2016, the Bermuda market has paid approximately just under a trillion dollars in claims to policyholders. In 2023 alone, the market paid close to $200 billion,” Mr Swan said. “So it’s important to have a robust macroprudential surveillance framework.”

Other speakers echoed concerns about the challenges regulators face in a fast-moving risk landscape. Beth Dwyer, the vice-president of the National Association of Insurance Commissioners, pointed out the importance of transparency in new financial products.

“We appreciate the market. We like the market. We want products in new areas,” she said. “But we also want to make sure that those processes are fulfilled, assuring that solvency is maintained and the investments are appropriate,” she said.

Tim O’Hanrahan, the head of international and advisory supervision for the Central Bank of Ireland, mentioned the growing risks faced by international firms and the need for strong governance.

“We spend an awful lot of time looking at how international firms are set up with appropriate governance – that the risks they transfer back to groups are appropriately protected,” he said.

“We need to make sure that those inter-company transactions are sufficiently strong and robust.”

Emerging risks for regulators include digitalisation, AI and climate change.

Andy Mais, the Connecticut insurance commissioner, reflected on how financial crises shaped regulators’ approaches.

“No regulatory system is perfect but our systems have to be designed to evolve in order to manage the changes that will happen,” he said.

Meanwhile, with digital transformation, climate change and international regulatory shifts adding to the complexity, Mr Swan made it clear that Bermuda must be proactive.

“It’s about making sure that we don’t potentially contribute to exacerbating systemic vulnerabilities,” he said.

The panel was moderated by Mahesh Mistry, the senior director, head of analytics in AM Best’s London office.