Bermuda focuses on innovation and diversification to build on reinsurance strength

Bermuda is seeking to use its position as a global re/insurance centre as a platform for broader economic diversification, innovation and new business formation, according to David Parker, head of business development at the Bermuda Business Development Agency (BDA).

Parker (pictured) said Bermuda “prides itself on being the risk capital of the world”, with re/insurance remaining “phenomenally important” to the island’s economy.

He said the jurisdiction now has more than 1,200 companies operating across the insurance and reinsurance industry, with more than 60 new insurance companies set up in Bermuda in 2024 alone.

However, Parker said the BDA’s role is also to ensure Bermuda is not overly reliant on any single sector, even a success story such as its re/insurance sector.

“The Business Development Agency, first and foremost, is focused on economic development and attracting new investment to the jurisdiction,” Parker said.

“What we’re aware of is if the jurisdiction is too heavily reliant on one industry, as huge a success story as it might be, then potentially vulnerable.

“One of the things that we’ve been focused on is economic diversification: how we can strengthen Bermuda as a jurisdiction for tech, for funds, for shipping, for technology.”

Parker said Bermuda’s insurance strength is helping to support growth in adjacent sectors, including digital assets, insurtech and shipping.

He pointed to the Digital Asset Business Act, introduced in 2018, as a framework that has helped attract companies including Circle, Coinbase and Kraken.

The next phase, he suggested, is the convergence between Bermuda’s insurance market and digital assets, citing companies such as life insurer Meanwhile, which operates through Bitcoin.

“Insurance has positioned Bermuda as a credible international financial centre, and that helps with the diversification when we’re trying to go after and engage with other companies in other industries to consider Bermuda as part of their global footprint,” Parker said.

Lloyd’s Lab for Bermuda and ILS dominance

Innovation in insurance is another priority. Parker highlighted the Bermuda Monetary Authority’s strategic partnership with Lloyd’s, under which a Lloyd’s Lab cohort was dedicated to Bermuda.

He said the initiative was designed to identify “the solutions that the industry is looking for in Bermuda in order to accelerate innovation” and connect them with insurtechs globally.

Parker said the BDA is now exploring whether Bermuda could develop its own insurtech accelerator, working with regulator the Bermuda Market Authority (BMA) and existing industry players.

“That’s something that we’re exploring at the moment, which I suppose would be Bermuda’s version of Lloyd’s Lab,” Parker said.

“The partnership last year with Lloyd’s Lab was a stepping stone to that. We don’t see Lloyd’s as a competitor, we see Lloyd’s and Bermuda as partners.

“Lloyd’s and Bermuda together form a formidable ecosystem,” he said.

Parker said Bermuda’s existing dominance in catastrophe bonds, with a 93% market share, gives it a strong base from which to support new areas of risk transfer, including cyber.

He said cyber risk is materially different from natural catastrophe risk because of its potential to affect multiple companies, countries and continents at once.

“Bermuda, because of its experience in risk management, the Bermuda Stock Exchange, because of its experience with ILS, cat bonds, for example, is perfectly placed,” he said.

“Bermuda is by extension, with its reputation for catastrophe management, well placed to also position itself for the management of cyber risk as well.”

Talent and ease of doing business

Parker said talent remains central to maintaining Bermuda’s position.

He said the BDA is focused on retaining existing talent, developing Bermudian talent and attracting international professionals.

That included a Future Leaders event alongside the Bermuda Risk Summit in March, aimed at showing schoolchildren the career opportunities available in the island’s re/insurance sector.

“One is retaining existing talent, developing future generations, and continuing to make Bermuda an attractive place to live for attracting international talent,” Parker said.

For new businesses, Parker said the BDA’s role is to act as a first point of contact, helping companies navigate registration, regulation, banking, office space and local professional services.

He said the agency’s concierge service is designed to improve ease of doing business and help companies establish themselves on the island.

“The role of the BDA is to be that first point of contact to help accelerate them through that process and ensure that whatever commercial support they need on island, they get access to,” Parker said.

“Our job, really, is to make ease of doing business in Bermuda better, to accelerate the process, and then continue to work with the company after it’s launched to ensure that its presence in Bermuda is successful.”

Parker said Bermuda’s pitch is not to become another Silicon Valley or London, but to lead in specific niches where it has a credible base, including digital assets, AI agents, insurtech and regtech.

He described Bermuda as a potential test bed for entrepreneurs.

“Think about the island as a sandbox where entrepreneurs can come, sit in their Bermuda shorts, develop new ideas, develop new products, develop new solutions, test them in a relatively small market, but a market that is very innovation friendly, both from a government perspective, but from a regulatory perspective as well,” Parker said.

“Use the small market as a test bed, as a lab, as a sandbox, whatever you want to call it, and then go global,” Parker added.