A Bermuda insurance market survey conducted by the Bermuda Monetary Authority has concluded that the major insurance franchises are actively conscious of corporate social responsibility.

The overall findings of this survey show that the insurance market has incorporated environmental, social and governance within various Enterprise Risk Management processes, which is deemed a sound starting point for the ESG risk considerations that are permeating throughout the industry.

The Bermuda Insurance Market Sustainability Results Report 2023 summarises the results of the 2023 Environmental, Social and Governance Survey conducted by the BMA for the Bermuda insurance industry.

The authority found that a large majority of the organisations surveyed incorporate ESG considerations into their enterprise risk-management frameworks to some extent, of which almost half (48 per cent) say that they have a stand-alone strategy in place, while a smaller portion views ESG mainly as a risk topic.

For the majority (70 per cent), strategic ESG responsibilities tend to be shared, such as between the board and the chief executive, while the risk aspects remain with the chief risk officer.

Just about half of the industry has carried out an assessment to identify specific material ESG risks. Results show an overall broadening in insurers’ approaches to ESG, from climate risk, where the most significant strides have been made and which remains on the top of the agenda, to other areas, mainly diversity, equity and inclusion.

The authority found that most respondents have climate change embedded in their risk-management framework either fully (59 per cent) or are in the process of doing so (27 per cent).

The report said this indicates that progress has been made.

It further notes: “The topic of the protection gap is an area where the industry indicated a desire to gain additional insights. Responses expressed uncertainty surrounding the topic and provided limited views.

“This appeared to be partly influenced by the fact that most Bermuda registrants are reinsurers and serve multiple markets. The most significant areas of protection gaps identified were driven by the different sectors.

“For the P&C industry, Nat Cat was perceived to be the most significant area of the protection gap, followed closely by cyber, while LT insurers viewed pension and health as the most significant areas.

“Insurers also indicated that the involvement of a variety of stakeholders and approaches would be necessary to effectively address the insurance protection gap. However, it sounds promising that just under half (46 per cent) of insurers have a strategically aligned approach or product that addresses closing protection gaps in relevant areas.

“It has been observed that industry has made significant progress in implementing DEI considerations. The survey also shows that 83 per cent of companies have created or are developing a DEI strategy.

“Additionally, 64 per cent have a DEI policy, recognising the benefits that DEI can bring to an organisation. In terms of recruiting and succession planning at the board and senior management level, DEI is noted as a primary consideration in selecting an appropriate candidate for 77 per cent of the industry, while 90 per cent specifically consider gender balance in board appointments.

“The industry also expressed that some of their DEI obstacles lay in areas such as limited talent pool availability, especially given the competitive market.”

• For The Bermuda Insurance Market Sustainability Results Report 2023, see Related Media.

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