Bermuda’s re/insurance industry has been singled out for how it managed the disruption of the Covid-19 pandemic.

Praise came from Craig Redcliffe, EY partner and regional insurance leader, region of Bermuda, Bahamas, British Virgin Islands and Cayman Islands.

It came during the release of EY’s 2022 Global Insurance Outlook report which highlights how the industry as a whole undertook large-scale change at a faster pace than many thought possible and was able to deal with unexpected developments.

The report discusses the mega trends reshaping the insurance industry and how leaders who address them with urgency, creativity and bold action stand to be richly rewarded.

EY’s 2022 Global Insurance Outlook report highlights ecosystems and open insurance, workforce transformation and sustainability as key areas of opportunity for insurers seeking a pathway to growth amid a challenging macroeconomic and competitive landscape, as well as climate change and tech-driven disruption.

But Mr Redcliffe is quoted as saying in an accompanying statement: “In their response to the Covid-19 pandemic, Bermuda’s insurers and reinsurers demonstrated their ability to undergo rapid and large-scale change to keep their operations running smoothly throughout.

“Industry leaders who show similar creativity and boldness now have the opportunity to thrive, if they act to harness technological opportunities, make their workplace attractive to rising generations of purpose-driven talent and craft solutions to help the world manage the threat of growing climate-related risk.

“With their well-earned reputation for innovation, Bermuda’s re/insurers have the capability to seize the opportunities for purposeful growth that will emerge from these major forces reshaping the industry.”

The mega trends identified by the report are:

Outside-the-box ESG solutions: As climate conditions worsen, future-orientated insurers are seeking more creative and innovative solutions, such as parametric policies and those featuring carbon offsets to help to protect against the physical risks of climate change.

In these endeavours, insurers must also improve pricing to accurately account for emerging risks and incentivise policyholders in enhancing the sustainability of their assets, for example pushing for green infrastructure to replace existing damaged infrastructure.

Combating the “Great Resignation”: Insurers need to address the traditional view of the industry as slow-moving and dull if they want to avoid a scarcity of key skills. In order to attract younger talent, insurers will have to take stronger positions on the social issues that matter most to rising generations of workers, such as diversity and inclusion and sustainability, and provide meaningful work, as well as offering flexibility, performance recognition and compensation models.

Open insurance and the era of ecosystems: Consumers are increasingly willing to buy insurance from non-traditional sources, such as retailers, banks and technology platforms.

“Open insurance” involves the sharing of insurance-related and personal data within a network, or ecosystem, of organisations collaborating to offer a service.

Consumers, as owners of their data, would have the ability to specify which businesses can use their information and for what purpose. Well-designed and executed ecosystems will unlock a range of revenue opportunities for insurers.

Eleanor Fisher, EY partner and regional sustainability leader, said: “The process of embedding ESG principles into all aspects of management has moved into the implementation stage for leading re/insurers, who view it is as key to enhancing stakeholder value.

“With the influence of climate change on underwriting and investment portfolios alike, an enterprise-wide sustainability strategy has become a fundamental pillar of risk management. Re/insurers must also be ready for mandatory ESG disclosures in the regulatory pipeline, led by the recommendations of the Taskforce on Climate-related Financial Disclosures.

“Among the insurance regulators moving in this direction is the Bermuda Monetary Authority, which has announced (page 5) its intention to integrate ESG considerations, particularly climate-related risk, into its supervisory approach in 2022.

“Re/insurers who take strong positions on ESG principles will also be well positioned to attract and retain employees who increasingly want to work for companies who share their values and demonstrate a commitment to corporate social responsibility.”