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Craig Swan, CEO, BMA
8 March 2023News

‘Insurance is just one implement in the toolbox’ Bermuda Risk Summit hears

Consumers should be advised that buying insurance is not always the best solution, regulatory leaders discussed at the Bermuda Risk Summit yesterday (March 7).

Lori Wing-Heier, a member of the Sustainable Insurance Forum, told the conference that families and businesses too often buy insurance without considering more suitable alternatives.

“We sell insurance because we want people to have peace of mind and financial security for their families,” said Wing-Heier, director of the Alaska Division of Insurance and a representative of the National Association of Insurance Commissioners.

“Somehow, we need to convince consumers that insurance is just one device in the toolbox. It should not be the first thing we turn to on every occasion.

“Look at savings, and at things you perhaps don’t need to insure. People need to consider what they themselves can afford to replace, and then buy insurance for catastrophic loss, as opposed to ‘my son’s bike was stolen from the front porch’.

“That shouldn’t be what insurance is for. It should be for bigger losses that would harm your family or your business in the long term.”

The panel discussion, titled “International Markets and Regulatory Cooperation”, took place at the Fairmont Hamilton Princess on the second day of the Bermuda Risk Summit. It was moderated by Craig Swan (pictured), chief executive officer of the Bermuda Monetary Authority, and focused on the importance of international standards in an increasingly global marketplace.

Panellist Tom Sullivan, senior associate director of the US Federal Reserve Board, said regulators need to strike the balance between enabling products and protecting them.

Sullivan said: “We must ask if your insurance is serving society as a whole. You should design your regulatory regime only after you answer that question.”

Wing-Heier said reforms in the US aim to level the playing field for new insurers but, she added: “Sometimes we are a little slow at reacting because we bring the politics in. We should be solving the problem in front of us and leave the politics at home, and really focus on what’s good for consumers and good for the industry.

“It shouldn’t take years for reforms to be passed.”




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