Many of Bermuda's business leaders have a priorities list that looks very different from 12 months ago, according to accountancy and advisory firm KPMG.

Items like risk management, capital management and governance have climbed up the agenda during a year of global economic upheaval, as companies do what is necessary to survive.

KPMG has published a document entitled "Frontiers in Finance: Turbulent Times", which examines how the business environment has changed and what companies can do to improve their prospects.

"The key for us is to understand the needs of our clients — not the things they needed six to 12 months ago, but the things they need going forward," said Mike Morrison, managing director of KPMG Advisory, in an interview.

To that end, the document highlights selected items for an 'urgent issues agenda', which include funding and liquidity, profitability and cost optimisation, risk management, capital, governance, staff and remuneration, fraud and investigations, regulation and counterparty ownership change.

Turmoil in the financial markets, large-scale frauds like the Madoff pyramid scheme and government involvement around the world, in the shape of bailouts and increasing regulation, have had varying impacts on all businesses.

In Bermuda, the insurance industry had been hit hard on both the assets and liabilities sides of the balance sheet, said Richard Lightowler, KPMG partner, insurance.

"The combination of investment losses and claims from hurricanes Ike and Gustav produced losses that were probably greater than in 2005, the year of KRW (hurricanes Katrina, Rita and Wilma)," Mr. Lightowler said.

He added that the massive influx of capital into Bermuda that had seen new companies form following major industry losses in past years showed no signs of being repeated this year, because of a lack of liquidity in the capital markets.

And while capital constraints were putting an upward pressure on premiums, falling asset values, falling sales and slowing economic activity meant any hardening of the market was slow in coming.

The past six months had brought realisation that damaging losses could happen on the assets side. "There's a real recognition now of the need to understand all the risks of an organisation," Mr. Lightowler said.

Enterprise risk management (ERM) was a much used term, which meant different things in different companies, but effective implementation was not proving easy, Mr. Lightowler said. He characterised it as a supply of pertinent, reliable and timely information to decision makers, to give them the knowledge they required to make informed decisions. Mr. Morrison said business people were still looking for expansion opportunities. "People are in business to grow," he said. "The impact of what has happened is that people are expanding through investing in their infrastructure, adding teams, for example, rather than making acquisitions."

Mr. Lightowler said regulatory considerations loomed large on insurers' agendas, particularly the upcoming Solvency II rules being introduced in the European Union by 2012.

The Bermuda Monetary Authority is striving to achieve recognition of an regulatory standard equivalent to the new European rules. This would rely on a concerted effort from the industry as well as the BMA, Mr Lightowler said, with focus on governance and risk management.

The challenges will increase for Bermuda businesses during the coming 12 months, Mr. Lightowler said, and KPMG is looking to increase its advisory role to local, as well as international businesses.

• KPMG will host a half-day seminar on June 3, featuring Brendan Nelson, the firm's vice-chairman in the UK and global chairman of Financial Services. Topics will include managing regulatory change and cutting costs.