Press Release - Bermuda insurance markets help policyholders overcome the limitations of traditional insurance products

HAMILTON, BERMUDA - Bermuda continues to lead the way in innovative solutions for the Insurance Linked Securities (ILS) market. Bermuda's ILS market is built on a foundation of prudence and pragmatism, with a regulatory framework specifically designed to address the evolving needs of policyholders.

Leveraging its recognised Special Purpose Insurer (SPI) framework, the Bermuda Monetary Authority (Authority or BMA) is intensifying efforts to close the protection gap associated with climate change and underserved emerging risks by pledging to issue a Consultation Paper in the fourth quarter 2025 on a new SPI framework
tailored for parametric products. As the nature, scale and frequency of Natural Catastrophe ("Nat Cat") risks shift globally due to climate factors, the financial impact on policyholders and the gap from non-insured losses continue to grow. This is further compounded by emerging risks beyond Nat Cat, such as cyber threats.

Recognising these challenges, the Authority believes developing a fit-for-purpose framework for parametric insurance covers will be instrumental in growing a robust parametric insurance market. A meaningful parametric market offers policyholders the potential to bridge gaps left by traditional indemnity insurance, while benefiting
from expedited claims and payout processes that can strengthen their resilience after loss events. As the risk landscape continues to change, the BMA remains committed to ensuring market solutions keep pace with policyholders' needs. The Authority reaffirms its role in providing a credible and proven regulatory environment that supports continued innovation and resilience in Bermuda's insurance sector.

Media Contact: Marianne Suschak-Matvey, Chief Corporate Affairs Officer; Direct line: (441) 278-0692; Cellular: (441)704-4117; E-mail: [email protected]