The world’s first Ocean Risk Summit held in Bermuda recently drew leaders from across political, economic, environmental and risk sectors to identify the potential exposures to ocean-related risk and tackle its broad-ranging consequences.

Scientists are telling us that the ocean is being transformed faster than anything our planet has experienced in 65 million years and, as such, the results could be transformational from multiple perspectives, including a broad new category of risk.

A new report titled Ocean Risk and the Insurance Industry, written by Falk Niehörster with the support of XL Catlin, was released on the opening day of the summit.

The report leaves no doubt about the urgent need for the insurance industry to equip itself for the severe and far-reaching impacts of ocean change — more intense storms, sea-level rise, loss of fish stocks, and ocean-borne viruses — and stresses that our industry has an opportunity to play a vital role by identifying risk-transfer solutions and mitigation strategies to avoid worst-case scenarios.

Here is one of the issues our sector must address: the geographies and economies most at risk are those least able to adapt. According to industry reports, as little as 26 per cent of overall economic losses caused by natural disasters worldwide during 2016 were covered by insurance, yet research shows that a 1 per cent increase in insurance penetration can reduce the disaster-recovery burden on taxpayers by 22 per cent.

Two related perceptions drive XL Catlin’s thinking on this. First, the findings of the scientific expeditions and research projects we support, which provide crucial new insights into what is happening to the ocean. Second, the realisation that the insurance industry’s failure to keep up with these rapidly evolving risks is rendering it less relevant — and therefore less trusted.

As one of the lead partners of the Ocean Risk Summit, alongside other organisations, which included Ocean Unite, Bermuda Institute of Ocean Sciences and the International Union for Conservation of Nature, XL Catlin is committed in helping to meet that challenge.

XL Catlin’s response is a comprehensive Ocean Risk Initiative to generate research and debate, identify solutions and develop effective insurance products that together will reinvent our approach to ocean risk — and reclaim the position of the insurance industry as a dynamic, forward-looking risk management partner.

Our initiative involves both new components and a consolidation of our longstanding work supporting ocean science. The three principal areas of activity are:

• Driving the development of the insurance industry’s response to ocean risk

• Supporting projects and reporting on the changing status of the identified areas of ocean risk

• Increasing ocean literacy through our curriculum-led oceans education programme and support for early career scientists via our Ocean Risk Scholarships

One of the key outcomes of the Ocean Risk Summit is the development of a new Ocean Risk Index. This initiative is designed to address the scarcity of measurable indicators on ocean risk and develop practical solutions to inform decision-making and catalyse action.

Alongside this, XL Catlin is supporting The Stimson Centre’s environmental security programme to identify the region’s most vulnerable to instability and insecurity from the changes taking place in and to the ocean, and develop threat maps and models to help governments and businesses predict, mitigate and manage these risks.

We also announced a partnership with The Nature Conservancy to explore the creation of a market for “blue carbon resilience credits”. Mangroves store up to five times more carbon than terrestrial forests, but also provide a natural barrier to powerful waves and storm surges in extreme weather. By valuing both the carbon storage and coastal protection benefits provided by this natural infrastructure, it could allow insurance companies and other businesses to offset their carbon footprint at the same time as increase the resilience of local communities most at risk from climate-change impacts.

Ocean risk is a fast-evolving and unpredictable field. It is creeping farther onshore, endangering more people, and we need to be prepared. Ocean risk is too big a challenge for any industry to tackle alone, so a joined-up, multisector approach is imperative.

Our conviction is that as Bermuda sits at the forefront of the impacts of ocean risk, and at the same time is a global hub of the insurance and reinsurance sector, it seems right to suggest that we should take the lead in stimulating a global, solutions-oriented debate and help to identify practical, effective responses to this significant global challenge.

•Michael McGavick is the chief executive of XL Catlin