Climate risk has a broad meaning for both the insurers and the insured. Global reinsurance in Bermuda has an impact of absorbing much of the catastrophe risk from around the world, explains Rachel Delhaise, Head of Sustainability for Convex Insurance. Insurers are expert at capturing the data surrounding risk in “catastrophe risk models” to gauge the possible financial impact of storms. These models are also useful in predicting what might be the impact of global warming, be it hurricanes, wildfires or flooding. Ms Delhaise notes that these incredibly complex models are very useful, but not perfect.

Tim Nielander, of African Risk Capacity Group, describes himself as a “construction guy” in a legal context, who practises in public international law to build co-operation mechanisms for countries that want to interact with the private sector. In the case of Bermuda, it is with the reinsurance companies to protect vulnerable populations against impacts of climate change such as drought, tropical cyclones and floods. ARC has four disaster-risk programmes around the world, the largest of which is in Bermuda. It covers about 100 countries, with institutions providing financing that includes Official Development Assistance, funders and those types of financiers. They are looking to address climate risk from the perspective of these vulnerable communities to provide speed and leverage to deal with disasters.

Moderator Stan Stalnaker, of Hub Culture, founded in Bermuda in 2002, dived further into the terms “adaptation” and “resilience”. There are 75 million refugees in the world, a number that is expected to grow to 120 million over the next 12 months. The United Nations is estimating this could grow to one billion by 2030. There are a half-dozen initiatives attempting to address this issue, including an ARC programme launched at COP28 called “Pacific Resilience”. People do not want to leave their homes, so this programme will provide development assistance to build against climate impacts such as rising sea levels. Another programme is aimed at agriculture in Latin America to reduce the need for migrants to leave and “stem the tide of those in flight”.

There is the potential for Bermuda to become Climate Central, says Stalnaker, with a focus on nature-based solutions. Convex has been working on data for nature-based solutions, especially for the oceans. Convex is owned by Stephen Caitlin, who is well known in Bermuda for his exploration of the sea mount and sporting environmental projects — including the 2010 Caitlin Artic Project to measure the impact of warming on the ice depth. This was followed by the 2015 SeaView survey that measured the impact on coral reefs.

A study of the ocean under way is engaging three partners, including Convex, the Blue Marine Foundation and the University of Exeter. The research work is in its second year. Led by Exeter, it involves a dozen other universities and is examining the carbon sequestered in the seabed, and how it is impacted by trolling and green life. “This is a rigorous assessment for open data to be available to everyone via a Harvard database,” Delhaise says. The data could be used for enhancing green protected areas that have minimal trolling or developing seagrass habitats. An outshoot could be interested in green carbon, nature-based credits.

The Bermuda Standard may be a way to pull together data. Stalnaker announced a new wiki is being designed to pull together disparate data from around the world into a Bermuda Standard. This would be a central resource for open climate data that is free and accessible to anyone. “Data shared can be a lot more powerful.”

Convex is a leading insurance company in Bermuda. The Convex general research on overall climate risk demonstrates the need for continued “risk transfer” through insurance coverage. There is no doubt that with wildfire, particularly, and less clear from hurricanes, they are being exasperated by global warming. There is a need for insurance companies to increase “the insurance penetration”; that is, coverage. Climate losses that are covered by insurance are about one third of total economic losses of $300 billion. That penetration in the Global South, in the southern hemisphere, is particularly very low. Insurance coverage needs to be expanded there to provide risk mitigation for the communities.

An insurance risk forum is working to increase coverage for these underinsured regions, Delhaise elaborates. Many Bermuda insurers are members of that forum. A global risk assessment for the 20 vulnerable countries will help gather the data to design risk-mitigation strategies. There are products such as parametric-triggered coverage, a type of insurance based on the probabilities of a predefined event.

There was an insurance facility for Africa established in Bermuda a number of years ago called Afririsk. Ten years hence, Walter Roban, the Deputy Premier, received the Argonaut Award from ARC for his efforts on the project. The 35 African member states signed the agreement to create a mechanism to deal with disasters. There was a massive study covering Africa and an intensive examination of where to establish the facility — between Rome, Athens, Switzerland and Bermuda. It is a unique, group-owned mutual insurance programme because it was funded by established overseas development facilities. It is a country co-operation project for funders and beneficiary countries. Afririsk was awarded non-profit status last week by the Bermuda Registrar, which will reinforce the mutual benefit of the funders.

Next, ARC is establishing in Bermuda a sharia-compliant insurance that will sit inside the Afririsk vehicle through a Waqf model. “Bermuda is punching above its weight,” says Nielander, by having an global impact in this area called Development Insurance. “The BMA works to create unique, interesting development finance facilities” — a public-private institution, explains Nielander. He then suggested Bermuda create legislation for a new class of development finance, wherein an array of state and non-state financiers, philanthropists and investors can blend funds that could address the first 16 sustainable development goals around the globe.

Blended Finance is an emerging topic. A global finance fund for risk mitigation announced at the Paris COP in 2015 has not been funded. This week, the United Arab Emirates funded $30 million to build momentum. These new blended finance approaches are known as a public-private institution, for which Bermuda can play a role. “These are vehicles which carry people with common goals in the same direction.”

• Patrice Horner, CFF, MBA, is attending COP28 as a special correspondent for The Royal Gazette and will be providing insights from this historic event