BDA unveils plans to establish climate risk finance industry as big as reinsurance

The Bermuda Business Development Agency (BDA) has launched an initiative to establish and promote Bermuda as the world’s climate risk finance capital.

Representatives from the Bermuda government, the BDA and its partners will offer virtual and, in due course, in person engagements to educate capital allocators, entrepreneurs and other stakeholders about Bermuda’s climate risk finance offering.

The BDA said it wanted to make climate risk finance “an additional leg on Bermuda’s economic stool,” noting it complemented its existing expertise in re/insurance, insurance linked securities (ILS) and professional services.

Stephen Weinstein, chair at the BDA, said the aim is for the climate risk finance industry to reach a size similar to Bermuda’s reinsurance sector.

“That is, substantial, international market firms, characterised by substantial domestic physical presence, employing Bermudians, hiring vendors and service firms, and generating visits and activity in the hospitality and leisure sectors,” he explained.

Roland Andy Burrows, chief executive officer at the BDA, said: “It is a natural fit for Bermuda to become a major base of operations for the global climate risk finance sector. Not only do we already have many of the world’s leading experts on weather-related catastrophes based here in our globally significant property catastrophe reinsurance market, we also have a financial services regulator, in the form of the Bermuda Monetary Authority, which understands the importance of environmental, social and governance (ESG) concerns.

Burrows praised the Bermuda Government for its ongoing commitment to climate and environmental initiatives. “Bermuda has for years punched above its weight, playing a disproportionate role on the world stage for a jurisdiction of our size,” he said. “By extending our global reinsurance leadership to climate risk finance, Bermuda can again prove to be a collaborative partner to the world’s key markets, a leading member of the worldwide family of responsible communities, playing a major role in delivering solutions to one of the most important challenges of our time.”